Annual Report • Apr 30, 2013
Annual Report
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Consolidated Annual Report2012
Consolidated Annual Report2012
The members of the management bodies, employers, head of administration together with the Company's consultants who are responsible for the preparation of 2012 consolidated annual report and financial accounts confirms that, according to their knowledge, annual consolidated and Company's 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 uncertaintiesfaced are accurately presented in the consolidated annual report.
AB "Snaigė" Managing Director Gediminas Čeika
AB "Snaigė" Finance Director Neringa Menčiūnienė
Report prepared: April 25, 2013
Place the report prepared: AB"Snaigė", Pramonės str. 6, Alytus
I will not be wrong to say, that 2012 was one of the most successful year for Snaigė AB during past five years. Based upon audited unconsolidated 2012 results Snaigė AB grew salesto more than 150 mln LTL in 2012 which is 31 percent higher than the same period last year. The Company generated 4.6 mln LTL profit which is almost 5 times more than for the last year. EBITDA (audited unconsolidated) for 2012 exceeded 13 mln LTL, which is 39 percent higher than for the last year.
Thissignificant increase in turnover and EBITDA wasreached due to successful export operations of carried out by the company. In 2012 Snaigė AB sold products to 33 European and Asian countries, export increased by 32 percent, and were 97 percent of total company sales.
For achievementsin the field of export Snaigė AB wasrecognized as"The Exporter of 2012"and awarded the prize of Lithuanian Chamber of Commerce, Industry and Crafts.
It is quite difficult to compete with worldwide giantsin of the market for home appliances, however, the results of Snaigė AB in 2012 demonstrate that it is possible if you are driven by several factors – high-quality product, successful marketing and sales policy, flexibility and reliability of the company."
Oursuccessisin connection with the company interrelation with the Russian business group"Polair" . First of all the company obtained more confidence taking strategic decisions,such us development of– Snaige Glassy, premium design line of refrigerators, marketing campaign in Ukraine and Moldova, which hastremendoussuccess in terms of sales volume and market share growth.
With the help of"Polair" the company in year 2012 produced and sold 4,9 thousand commercial refrigerators in Russian market.
In 2012 the company accomplished a lot by creating new products and improving the existing ones. At the beginning of the year we improved refrigerators"Snaigė Ice Logic", implemented new technologiessuch as"Touch screen" electronic control,"Air Active", air circulation system,"0̊C Fresh Zone" section, promoted the luxurious "Snaigė" Glassy line and presented several new models of freezers.. These refrigerators received positive responses from the customers both in Lithuania and Western and Easter Europe.
In 2012 Snaigė AB invested 2 mln LTL to the development of new products and improvement of existing ones. Total investment of the company reached 3 mln LTL.
According to audited consolidated data Snaigė AB reached 146.5 mln LTL of audited consolidated turnover and generated 1 mln LTL of audited consolidated net profit in 2012.
In 2013 we will continue to pay more attention to export sales growth in strategic markets and the development of new products and technologies. I have no doubt the next year will furtherstrengthen us and will delight us by great results.
Managing Director, Gediminas Čeika
| GENERAL INFORMATION ABOUT AB SNAIGĖ | 5 |
|---|---|
| 1.1 Accounting period of the annual report-prospectus | 5 |
| 1.2 The basic data about the Company | 5 |
| 1.3 The type of the Company's main business activities | 5 |
| 1.4 The Company's group structure | 5 |
| 1.5 Information about the Company's offices and affiliates | 6 |
| 1.6 Short history of the Company's activities | 6 |
| 1.7 Mission. Vission. Values | 7 |
| 1.8 List of the most important events in 2011 | 7 |
| 2. SNAIGE GOVERNANCE AND MANAGEMENT | 7 |
| 2.1 The Company's management bodies | 7 |
| 2.2 Corporate governance bodies | 8 |
| 2.3 The Company's group's management structure | 9 |
| 2.4 Procedures of changing Company's articles of association | 9 |
| 3 AB SNAIGĖ AUTHORISED CAPITAL, SHAREHOLDERS, INFROMACION ABOUT SECURITIES | 10 |
| 3.1 Issuers authorized capital | 10 |
| 3.2 Shareholders | 11 |
| 3.3 Information about trading of issuers securities in the regulated securities markets | 11 |
| 3.4 Information about the repurchase of own shares | 13 |
| 3.5 Dividends | 13 |
| 3.6 Contracts with public circulation of securities dealers | 14 |
| 4 AB SNAIGĖ OPERATING REVIEW | 14 |
| 4.1 General rates, describing the The Company's business performance, their behavior | 14 |
| 4.2 Production | 14 |
| 4.3 Sales | 15 |
| 4.4 Supply | 17 |
| 4.5 Employees and human resource policy | 17 |
| 4.6 Investment policy | 18 |
| 4.7 Environment protection | 20 |
| 4.8 Risk factors related to the business of the Company | 21 |
| 4.9 Related party transactions | 22 |
| 4.10 Legal and arbitrary processes | 22 |
| 5. OTHER INFORMATION ABOUT AB SNAIGĖ | 22 |
| 5.1 Membership in associated organisations | 22 |
| 5.2 Patents, licences and contracts | 23 |
| 5.3 Recent and the most important events of the Company | 23 |
| 5.4 Strategy and Plans | 28 |
| 6. Disclosure form concerning the compliance with the | |
| Governance Code for the companies listed on the regulated market | 30 |
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o n s o li d a te d a n n u a l R ep o R t 2012
The annual report-prospectus has been prepared for the year 2012.
The name of the Company – SNAIGĖ PLC (hereinafter referred to as the Company) Authorised capital on 31 December 2012– 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 on24 May 2012 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.
The Company's group consist of parent refrigerator manufacturer "Snaigė" based in Alytus and the following subsidiaries:
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;
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 ISO14001 certification forimplementing an environmental managementsystem; 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 lossofproductionanddevaluationofthe rubble conditionedtoclose theCompany'sfactory inKaliningrad; 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
2012 - In 2012 through the implementation period of the tender offer, VAIDANA, UAB bought-up 12,379,525 ordinary registered shares of Snaigė AB, with nominal value of LTL 1 each and on 1st of June 2012 had 36,096,193 units (91.1%) of the Company's shares.
2012 - For achievementsin the field of export Snaigė AB wasrecognized as"The Exporter of 2012"and awarded the prize of Lithuanian Chamber of Commerce, Industry and Crafts
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o n s o li d a te d a n n u a l R ep o R t 2012
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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.
Within the framework of"Development of new products" program, and with the support of European Union structural funds under a measure"Intelektas LT", a project"Strengthening of competitiveness of AB"Snaigė" by investing into development of new generation refrigerator series" has been carried out for almost two years. It was successfully completed in September, 2012.
There was developed sales of refrigerators to Tajikistan and Uzbekistan.
For achievementsin the field of export Snaigė AB wasrecognized as"The Exporter of 2012"and awarded the prize of Lithuanian Chamber of Commerce, Industry and Crafts.
There have been developed and launched the following new products within the year:
Refrigerator RF36 with glass on door;
Refrigerator RF ND with ventilator;
Refrigerator RF ND with electronics and glass on door;
Refrigerator RF34/36 ND with"0" compartment;
Refrigerator CD480 with static condenser;
It wasrenewed an internal design of existing refrigerator models(new colours of internal dishes and glossy profiles on shelves).
In 2012 through the implementation period of the tender offer, VAIDANA, UAB bought-up 12,379,525 ordinary registered shares of Snaigė AB, with nominal value of LTL 1 each and on 1st of June 2012 had 36,096,193 units (91.1%) of the Company's shares.
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 differencesfrom competencesindicated 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 was elected during the ordinary shareholders general meeting which will be held on the 30th April, 2012.
AB"Snaigė"usesthe Company's articles of association, Public companieslaw of Republic of Lithuania, other legal acts issued by Republic of Lithuania and European Union as legal guidelines for operations.
2.2.1InformationaboutthemembersofmanagementbodieswithregardtotheshareoftheCompanyauthorizedcapital
| NAME | Position | Theavailablenumber of shares,units | Thesharecapital,per cent | Votes,per cent | |
|---|---|---|---|---|---|
| BOARD | |||||
| aleksey Kovalchuk | aB"snaigė"Chairman of theboard | - | - | - | |
| MartynasČesnavičius | aB"snaigė"memberof theboardtill20120816 | 15 | 0,00 | 0,00 | |
| Robertas Beržinskas | aB"snaigė"memberof theboardtill20120816 | - | - | - | |
| andrei dribny | aB"snaigė"memberof theboard | - | - | - | |
| Mikhailstukalo | aB"snaigė"memberof theboard | - | - | - | |
| Robin peterWalker | aB"snaigė"memberof theboard | - | - | - | |
| dmitry Komissarchik | aB"snaigė"memberof theboardfrom 20120816 | - | - | - | |
| ADMINISTRATION (Managing Directorand ChiefFinancier) | |||||
| GediminasČeika | aB"snaigė"Managing director | - | 0,00 | 0,00 | |
| neringa Menčiūnienė | aB"snaigė"Finance director | - | - | - |
On August 8th, 2012 the Extraordinary General Meeting of Shareholdersrevoke the members of the Board Martynas Česnavičius and Robertas Beržinskas and elect Dmitry Komissarchik asthe member of the Board till the end of the term of office of the Board.
2.2.2 Information on the management bodiesinvolvement of other companies, institutions and organizations
Participating in other companies activities and interests (31 December, 2012):
| name | nameoforganisation,position | shareof thecapitalandvotesavailable |
|---|---|---|
| in other companies, in percentage | ||
| Aleksey Kovalchuk | Does not participating in other Lithuanian companies activities and interests - |
|
| Andrei Dribny | Does not participating in other Lithuanian companies activities and interests - |
|
| Mikhail Stukalo | Does not participating in other Lithuanian companies activities and interests - |
|
| Robin Peter Walker | Does not participating in other Lithuanian companies activities and interests - |
|
| Dmitry Komissarchik | Does not participating in other Lithuanian companies activities and interests - |
|
| Gediminas Čeika | Does not participating in other Lithuanian companies activities and interests | |
| Neringa Menčiūnienė | UAB"Almecha", Chairman of the board | - |
2.2.3 Chairman of the Board, the Head of the administration and Chief Financial
| name education,qualification Workplacesandpositionsduringtherecent10years Aleksey Finance Academy of OAO POLAIR, General Director, since 2009; Kovalchuk the Government of Federal Agency for Construction, Housing and Utilities. the Russian Federation, Moscow. Gediminas Vilnius University, From January 2008 – AB"Snaige" Managing Director Čeika Bachelor in Economics. 2005 12 – 2008 01 – AB"Snaigė" Sales Director 2001 05 – 2005 12 -"Kraft Foods Lietuva" Business Clients Relationships Director for the Baltic States 1994 – 1997 -"Kraft Foods Lietuva" Sales Manager forVilniusregion Neringa Vilnius University, From 2008 06 02 AB"Snaigė" Finance Director Menčiūnienė analysis of economic From 2008 05 – 2010 05 AB"Vilniaus Vingis" Liquidator activities and accounting, 2006 05 – 2008 05 – AB"Vilniaus Vingis"Managing Director accountant - economist 2005 08 – 2006 04 – airline AB"Lietuvos avialinijos" qualification Finance and Purchase Director 2003 03 – 2005 08 – AB"Vilniaus Vingis"Chief Accountant 2001 01 – 2003 03 – AB"Vilniaus Vingis"Chief Accountant |
||
|---|---|---|
| 2000 11 – 2001 05 – Internshipat"Kraft Foods"Company inCzechRepublic | ||
| 1997 – 2000 11 -"Kraft Foods Lietuva" SalesDirectorfor Latvia and Estonia | ||
| 1996 08- 2003 03 – AB"Vilniaus Vingis"Accountant | ||
| 2001 01 – 2003 03 – AB"Vilniaus Vingis"Chief Accountant assistant | ||
| 1996 08- 2003 03 – AB"Vilniaus Vingis"Accountant |
2.2.4 Information aboutstart date and end date of the office term of each member of the management body
| enddateof theofficeterm | |
|---|---|
| 2011 12 14 | Till 2015 the General Meeting of Shareholders |
| 2011 12 14 | Till 2015 the General Meeting of Shareholders |
| 2011 12 14 | Till 2015 the General Meeting of Shareholders |
| 2011 12 14 | Till 2015 the General Meeting of Shareholders |
| 2006 05 02 | Till 16 08 2012 |
| 2008 04 23 | Till 16 08 2012 |
| 2012 08 16 | Till 2015 the General Meeting of Shareholders |
| 2008 01 03 | Term less agreement |
| 2008 06 02 | Term less agreement |
| startdateof theofficeterm ADMINISTRATION (Managing Director and Chief Accountant) |
On the 16th of August, 2012 the Company informed the NASDAQ OMX Vilnius Stock Exchange information system that on the 16th of August, 2012 during the extraordinary general meeting of shareholders revoke Martynas Česnavičius and Robertas Beržinskasfrom the Board members ofthe Company and electDmitry Komissarchik asthe member of the Board for remaining term of this Board office.
2.2.5 Information regarding valid conviction ofthe members ofthe management bodiesforthe offences against property, farming procedure and finance
There is no such information.
2.2.6 Information about benefits and loans granted to governing bodies
No benefits and loans granted to governing bodies.
2.2.7 Information about the total amounts and average amounts of the salaries, tandems and other profit benefits paid by the Company during the reporting period per person. As well assalariesreceived by ManagingDirector and Finance Director
During 2012 no salaries were paid to the members of the management bodies.
2.2.8 Information about the salaries, tandems and other profit benefits paid to the members of the Company's Board of observers, Board and Administration sourced from the enterprises where the share of the authorized capital owned by the Company amountsto more than 20 percent
No such payments were made during 2012.
2.2.9 Information aboutthe loans, warranties and securities ofthe performance ofliabilities granted to the members of the management body during the accounting period.
No loans, guarantees there issued for the members of managements bodies during the accounting period.
2.2.10 Important agreements,the party of which isthe Company and which would take effect, change, or would stop being valid in case the control ofthe Company changes, also the effect ofsuch agreements, exceptfrom the cases when the disclosure ofsuch agreements would result in large damage to the Company
As far as it is known to the Company, there are no such agreements.
2.2.11 The Company's and its management bodies members or employees agreements, describing compensation in case the members or employeesresign, or are fired without grounded reason, oriftheir 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. Rolandas Lukšta – sale 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 Shareholderstakes 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 decisionsto 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
| nameof thesecurities capital, |
amountof thesecurities |
nominalvalue,ltl | total nominalvalue,ltl | shareoftheauthorized in percentage |
|---|---|---|---|---|
| Ordinary registered shares | 39,622,395 | 1 | 39,622,395 | 100 |
| ISIN LT0000109274 |
3.1.2 Changesin authorized capital during the last 3 years
| Registration of | thesizeof the | Change | Reason for change | thesizeof the |
|---|---|---|---|---|
| changed | authorizedcapital | authorizedcapital | ||
| authorizedcapital | beforethechange | after thechanged | ||
| 2010.04.20 | 27,827,365 | +2,908,350 | Increase of authorized capital by converting shareholders convertible bonds to 2 908 350 units oridinary shares. |
30,735,715 |
| 2011 05 12 | 30,735,715 | +8,886,680 | Increase of authorized capital by converting shareholders convertible bonds to 8 886 680 units oridinary shares. |
39,622,395 |
3.1.3 Information with regard to prospective increase of the authorized capital by converting or trading the issued loan orsecondary securitiesfor the shares
The company issued 2 emissions of convertible bonds:
ISIN LT0000402620, 2 yearsterm 3 m LTL total nominal value bonds emission, the term of redemption April 12th, 2013.
ISIN LT0000402638 2 yearsterm 4.3 m LTL total nominal value bonds emission, the term of redemption May 2nd, 2013.
On the 18th of April, 2012 signed and paid Snaige, AB convertible bonds emission:
total number of convertible bonds: 30,000 units;
nominal value of the convertible bond: LTL 100;
issue price per convertible bond: LTL 100;
total nominal value: LTL 3,000,000;
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 the redemption day to receive a redemption amount or to request to change convertible bondsto the shares at the end of the redemption term; also, all other rightsset to the creditors of the companies by the laws;
subscription and payment day: April 18th, 2011;
duration: 725 days;
interest: 9% per annum;
the method of interest calculation: act/365;
redemption day: 12 April 2013;
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, granting its holders property and non-property rightsset by the laws and Articles of Association ofthe Company;
the conditions of change of convertible bonds to shares: convertible bonds shall be changed to shares accordingly to the request of the holdersubmitted to the Company in written no later than 10 business days before the redemption day of convertible bonds;
total number of convertible bonds: 43.000 units;
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Association of the Company;
the term of exchange: convertible bonds shall be changed to shares on the redemption day;
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. On 15 June 2012 the Company redeem the bonds issue (ISIN LT1000402313), with total nominal value EUR 1,000,000, duration – 731 days.
95.34 per cent of the authorized capital of the Company is owned by the companiesregistered in Lithuania and individuals, 4.46 per cent non-residents. As of 31 December 2012, the number of Company'sshareholders comprised 940 (in 2011 – 1,216). The major shareholder of the Company – UAB "Vaidana", which controls 91.10 per cent of shares.
The major shareholders who own or control more than 5 percent of the issuer's authorized capital are listed below:
| names (Company | amountof theordinary registeredsharesavailable, in pcs. |
shareof theauthorizedcapitalandvotesavailable, in percentage | |||||
|---|---|---|---|---|---|---|---|
| names,addresses, enterpriseregister codes) of theshareholders |
total incl. theones ownedbythe shareholder |
total | incl. theordinary registeredsharesowned bytheshareholder |
total incl. the shareof the entitiesgroup operatingjointly, |
|||
| shareof thevotes |
shareof thecapital |
shareof the appointedvotes |
shareof thecapital |
in percentage | |||
| Vaidana uaB – Konstitucijosave.7,Vilnius, lithuania,code302473720 |
39,069,193 | 39,069,193 | 91.10 | 91.10 | 91.10 | 91.10 | - |
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 isinformer and due to which the transfer ofsecurities or voting rights can be restricted
The issuer has no information about any Shareholder agreements of such type.
39,622,395 ordinary registered shares of AB"Snaigė"are included into the Secondary trading list of the NASDAQ OMX Vilniusstock exchange. The total nominal value of the sharesis 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'ssecuritiesin stock exchanges and other organized markets
Trade ofthe Company's ordinary registered sharesin the securitiesstock exchange wasstarted 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 Vilniusstock exchange
Trade in Company's shares during 2009-2012.
| accountingperiod | last session | price, max,euR | price, min,euR | shares,pcs. | turnover, |
|---|---|---|---|---|---|
| price,euR | mln.euR | ||||
| 2009 | 0,165 | 0,339 | 0,049 | 36255524 | 6,38 |
| 2010 | 0,268 | 0,324 | 0,156 | 38297848 | 9,48 |
| 2011 | 0,525 | 0,530 | 0,256 | 16137891 | 6,13 |
| 2012 | 0.497 | 0.600 | 0.401 | 4,717,209 | 2.48 |
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=2008&end_d=31&end_m=12&end_y=2012
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=2012&end_d=31&end_m=12&end_y=2012
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, 2012. The information is from AB NASDAQ OMX Vilnius internet page:
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http://www.nasdaqomxbaltic.com/market/?pg=charts&lang=lt&idx_main%5B%5D=OMXBBGI&idx_main%5B% 5D=OMXV&add_index=OMXBBPI&add_equity=LT0000128266&idx_equity%5B%5D=LT0000109274&period=other&start_d=1&start_m=1&start_y=2009&end_d=31&end_m=12&end_y=2012
| index/equity | 01.01.2009 | 31.12.2012 | +/-% |
|---|---|---|---|
| OMX Baltic Benchmark GI | 228,12 | 546.98 | 139.78 |
| OMX Vilnius | 179,25 | 355.08 | 98.09 |
| SNG1L | 0,16 EUR | 0.50 EUR | 212.01 |
The securities are traded only on NASDAQ OMX Vilnius stock exchange.
3.3.3 Capitalization of the Company'sshares
The information is from AB NASDAQ OMX Vilnius internet page: http://www.nasdaqomxbaltic.com/market/?pg=capital&list%5B%5D=BAMT&list%5B%5D=BAIT&list%5B%5D=BAF N&market=XVSE&period=other&start_d=30&start_m=12&start_y=2009&end_d=28&end_m=12&end_y=2012
| equitylist | 2009-12-31 | 2010-12-31 | 2011-12-31 | 2012-12-31 |
|---|---|---|---|---|
| snG1l | 4,593,836euR | 8,237,172euR | 20,801,757euR | 19,695,330euR |
Since the ordinary registered shares are included into the Additional trading list of NASDAQ OMX Vilnius stock exchange, the purchase-sale transactions of the shares can be executed only in NASDAQ OMX Vilnius stock exchange. The transactions performed outside the stock exchange comprise exchange, endowment, inheritance and settlement of debts and repay transactions.
| The transactions with regard to the ordinary registered shares of AB"Snaigė" executed outside stock Exchange | |||||||
|---|---|---|---|---|---|---|---|
| accounting | price | price | Monetary | amount | non-monetary | amountof | |
| periods | (euR), max | (euR), min | settlement,amount | of transactions | settlement, | transactions | |
| of securities (pcs.) | amountof | ||||||
| securities (pcs.) | |||||||
| 2012 m. I quarter | 0.94 | 0.51 | 899,543 | 18 | 11,000 | 2 | |
| 2012 m. II quarter | 1.86 | 0.99 | 81,641 | 3 | 22,982 | 2 | |
| 2012 m. III quarter | - | - | - | - | 8,914,986 | 3 | |
| 2012 m. IV quarter | - | - | - | - | 7,447,372 | 2 | |
During 2012 no repurchase of own shares was made. The Company had not own shares at the end of the 2012 year.
The Company does not have an established procedure for allocation of dividends. The General Shareholders' Meeting decides whether to pay dividends.The Company has not paid dividends in last five years.
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):
| 2012 | 2011 | 2010 | 2009 | 2008 | |
|---|---|---|---|---|---|
| Turnover, th.LTL | 146,548 | 111,133 | 113,839 | 123,036 | 340,956 |
| Gross profit, th.LTL | 24,596 | 16,397 | 17,427 | 12,622 | 42,565 |
| Net profit (loss), th.LTL | 1,019 | (5,042) | (2,612) | (38,182) | (24,100) |
| Average share price, th.LTL | 1.817 | 1.288 | 0.86 | 0.61 | 3.52 |
| FinancialFigures | 2012 | 2011 | 2010 |
|---|---|---|---|
| Profit before tax indicator, % | 0,70 % | -5.46 % | -2.7% |
| General mark-up, % | 16.78 % | 14.75 % | 15.31% |
| EBITDA mark-up, % | 7.87 % | 5.61 % | 8.06% |
| Solvency ratio, % | 117.13% | 81.91% | 63.9% |
| Debt to assets ratio, % | 64 ,01% | 59.99 % | 67.57% |
| Return on average shareholders' equity, % | 2.69 % | -14.11 % | 8,55% |
| shares indicators | 2012 | 2011 | 2010 |
| Earnings per share, LTL | 0.03 | -0.14 | -0.09 |
| Average annual share market price, LTL | 1.817 | 1.288 | 0.79 |
| EBITDA per share, LTL | 0.29 | 0.16 | 0.30 |
| EBITDA multiplier (EBITDA per share / | 0.16 | 0.12 | 0.38 |
| Average annual share market price) | |||
| Total dividends, in thous. LTL | - | - | - |
| Dividends per share, LTL | - | - | - |
| Average net book share value, LTL | 0.96 | 0.9 | 0.99 |
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;
In 2012, mainly produced by the combined refrigerators with separate external doors.
The sales figures of Alytus Factory for the last three years are as follows:
| typeofactivities | 2012 | 2011 | 2010 | ||||
|---|---|---|---|---|---|---|---|
| units | perc. | units | perc. | units | perc. | ||
| Refrigerators sold, units | 218,419 | 100 | 171,433 | 100 | 184,635 | 100 | |
| including: | |||||||
| Combined refrigerators – freezers with | 159,916 | 73.2 | 123,082 | 71.8 | 125,938 | 68.2 | |
| separate external door | |||||||
| Domestic refrigerators (single cooler) | 11,509 | 5.3 | 8,046 | 4.7 | 13,992 | 7.6 | |
| Freezers | 32,879 | 15.1 | 30,322 | 17.7 | 34,893 | 18.9 | |
| Commercial refrigerators | 14,115 | 6.5 | 9,983 | 5.8 | 9,812 | 5.3 |
4.2.2 Termination orreduction of production volume with the critical effect on the Company's performance during recent 3 economical years
Kaliningrad factory stopped working on 2009 03 02
The company dividesitssales marketsinto the following main groups by importance ofsales 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 2012 Snaigė, AB sold over 218.6 thousand refrigerators. Revenuesfrom main production salesreached 140.4m LTL, that is, 26.4 per cent lees as compared to the previous yearsales on the Eastern market accounted for the majority of sales revenue (67.71 per cent). Slightly lower figures (29.05 per cent) were on the Western market. Lowest sales revenue (3.24 per cent) was on the Baltic market.
Exports accounted for 97.45 per cent of total product sales, i.e. 136.85m LTL.
Company'ssalesin 2012 (according to salesrevenue):
In 2012 the company sold 148 thousand production pcs on the Eastern market and earned 95.1m LTL in salesrevenue, i.e. 70 per cent increase as compared to 2011.
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 positionsin 2010. In 2012 Snaigė, AB sold 115.6 thousand fridges on the Ukrainian market and salesrevenue reached 72.9m LTL, i.e. 64.2 per cent the revenue of the previous year. Expert data show that Snaigė, AB had a 10 - 12 per cent market share on the Ukrainian household refrigerator market.
In Moldova market the company sold 6.5 thousand production pcs and generated 4.2m LTL in revenue. Expert data show that Snaigė, AB had around 8 per cent marketshare on the Moldavian household refrigerator market. 2012 for Snaigė, AB also continued market of trade connections with ,Kirgizia,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 2012 the company sold 14 thousand production pcs and earned 9.2m LTL in revenue 34 percent more than the last year.
Salesin the Eastern market in 2012 (according to salesrevenue):
On the Western market Snaigė, AB sales in 2012 were 64.3 thousand production pcs and 40.8m LTL in revenue. This constitutes 11.9 per cent drop in revenue as compared to the previous year. The majority of production was sold and revenue generated on the German market (26.9 thousand pcs; 17.6m LTL), French market (11.6 thousand pcs; 6.8m LTL), and Portuguese market (7.4 thousand pcs; 4.3m LTL).
The market of domestic electric appliances had not demonstrated any clear evidence of the recovery. Otherwise the recession was continuing in Central and West Europe countries.
During 2012 year the Company was started commercial relations and started to realize the Company's production for these clients:
Bomann (Germany) Kanka (Germany) STS (Finland) Baumatic (UK) Links (UK) Care2Supply (Netherlands).
The long term partners Severin (Germany), Orima (Portugal), Conforama (France) are continuing successful relations with Snaige AB.
.Snaigė, AB struggled to compete with Chinese andTurkish 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.
Poland- 2,99% 2,03% - Italy Swidzerland - 3,78% 2,92% - Hungary Portugal -10,42% Czech Republic - 10,15% France - 16,67% 43,21% - Germany 1,99% - Bulgaria 5,84% - Other
Salesin the Western market in 2012 (according to income):
In 2012 Snaige AB in the Baltic States market had sold more than 6.4 thousand refrigerators and its income was about 4.6 million LTL.
At the same period in Lithuania Snaige AB had sold about 4.9 thousand refrigerators and had got more than 3.6 million LTL incomes. According to the analysis Snaige AB had hold about 6 percents of the domestic refrigerators' market in Lithuania in 2012.
In the meantime in Latvia Snaige AB had sold about 1.1 thousand refrigerators and its incomes was close to 0,7 million LTL. At the same period of time in Estonia Snaige AB had sold a little bit more than 0.4 thousand refrigerators and had got more than 0.26 million LTL.
Sales in the Baltic market in 2012 (according to income):
In 2012 The Company sold 73.2 percent of the products with their brand SNAIGE. Besidesthese, 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 (Italy): Bartscher; Brandy Best; Coldis; Continent; Cool; Exquisit; Frigibel; Helkina; KBS; Orima; Raymond;
The Company's brand portfolio in 2011 (according to income):
26,8% - Other trade mark's 73,2% - "Snaigė"
Tschibo
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 materialssuppliers 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 prioritiesset 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 technicalservicing 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 changesfaced 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, mo-
tivated 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 isto help the Company to adapt to new requirements of business environment and accomplish strategic goals while increasing administration effectiveness, connecting human resource practice with common the Company's business strategy, evaluating human resources.
Human resource planning. To ensure effective number of employment positions and structure planning, to ensure human resource demand planning, evaluation of planning quality.
Analysis of operations. In order to ensure more effective management of human resources it is necessary to evaluate new operation tasks, to spin off ineffective operations, doubling of functions, to regroup and reassign functions.
Development of the Company. Personnel development is a necessary condition for achieving the Company's strategic goals, as while learning personnel obtains qualification and skills. Changing the Company's challenges, environment where the tasks have to be completed, application of new technologies 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 goalsto 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 isimportant that it is not directed to the past i.e. results of person's work, but also to the future – his abilities, ability to change, implement more complex tasks – into his potential.
Personnel motivation. During the surveys majority indicate the insufficient remuneration as the most important factor hindering higher motivation. In current difficult conditions it is necessary to pay more attention to strengthening social motives: encourage personal goals, increase responsibility taken, increase association with a group or team, form conditions to realize management, self expression skills.
| employees | 2012 | 2011 | 2010 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| amount | % | average | amounts | % | average | amounts | % | average | |
| salary,ltl | salary,ltl | salary,ltl | |||||||
| managers | 5 | 0.8 | 20,341 | 4 | 0.6 | 26,476 | 4 | 0.6 | 20,524 |
| specialists | 118 | 18.5 | 3,181 | 123 | 19.7 | 3,109 | 127 | 19.9 | 2,995 |
| workers | 514 | 80.7 | 1,659 | 498 | 79.7 | 1,494 | 506 | 79.4 | 1,394 |
| In total: | 637 | 100,0 | 2,082 | 625 | 100.0 | 1,966 | 637 | 100.0 | ,818 |
4.5.2 The employees of the Company in 2010-2012 according to the personnel groups:
4.5.3 The structure of the Company's employeesin 2010-2012 according to education level
| Educationlevelof the | 2012 | 2011 | 2010 | |||
|---|---|---|---|---|---|---|
| employees | Amount | % | Amount | % | Amount | % |
| universityeducation | 101 | 15.9 | 103 | 16.5 | 100 | 15.7 |
| professional high schooleducation | 389 | 61.1 | 377 | 60.3 | 383 | 60.1 |
| secondaryeducation | 139 | 21.8 | 136 | 21.8 | 145 | 22.8 |
| uncompletedsecondaryeducation | 8 | 1.2 | 9 | 1.4 | 9 | 1.4 |
| total: | 637 | 100 | 625 | 100 | 637 | 100 |
4.5.4 The employees of the Company and its subsidiaries in 2010-2012 according to the personnel groups*
| employees | 2012 | 2011 | ||||
|---|---|---|---|---|---|---|
| amount | % | amount | % | amount | % | |
| managers | 9 | 1.2 | 8 | 1.1 | 8 | 1.04 |
| specialists | 156 | 20.2 | 153 | 20.5 | 171 | 22.2 |
| workers | 606 | 78.6 | 584 | 78.4 | 591 | 76.8 |
| Total: | 771 | 100 | 745 | 100 | 770 | 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 ofshort-term liabilities and current assets,ratio of total liabilities and total assets.
| teCHpRoMinVest | MoRoZtRade | liGa seRVis | snaiGe – uKRaine | alMeCHa | |
|---|---|---|---|---|---|
| Registration date, | Registration date | Registration date | Registration date | Registration date | Registration date |
| head-officeaddress | november,2002. address: | May,2004. address: | august,2005, address: | november,2002. address: november,2006. address: | |
| Bolshja okruznajastr.1-a, | prospektMira52, | prospektMira52, | Grushevskystr.28-2a/43, | pramonesstr.6, | |
| Kaliningrad, Russia | Moscow, Russia | Moscow, Russia | Kiev, ukraine | alytus,lithuania | |
| typeofactivities | manufactureof | salesand marketing | salesand marketing | salesand marketing | production ofother |
| refrigerators | services | services | services | equipmentand | |
| machinery | |||||
| shareoftheauthorizedcapital | 100 | 100 | 100 | 99 | 100 |
| availableto aB"snaigė",% | |||||
| theauthorizedcapital | 91,566,441 | 859 | 859 | 53,650 | 1,375,785 |
| (ltl) | |||||
| shareof theauthorized | Completelypaid | Completelypaid | Completelypaid | Completelypaid | Completelypaid |
| capitalunpaidbythe | |||||
| Company | |||||
| 2012profit (loss) (ltl) | (18,952,267) | - | (96,722) | (3,433) | 33,755 |
4.6.2 The major investment projects amounting to more than 10 percent of theCompany's authorized capital, which have been implemented during 2 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.
Within the framework of"Development of new products" program, and with the support of European Union structural funds under a measure"Intelektas LT", a project"Strengthening of competitiveness of AB"Snaigė" by investing into development of new generation refrigerator series" has been carried out for almost two years. It was successfully completed in September, 2012. In cooperation with scientists from Faculty of Mechanical Engineering and Mechatronics of Kaunas Technology University, who provided the research service by making research on the new cooling systems during the project, have been created series of modern models of refrigerators. These models will be gradually implemented into production over the coming three years. A gross value of this project was 1.653.811,42 LTL, of which 755.393,58 LTL has been funded by European Regional Development fund.
The Company invested 257,0 thousand LTL in 2012 for mastering of especially important new technological projects, updating of existing technology processes and increasing of production capacities.
It was also spent 140,3 thousand LTL of investments for realization of effective heat and power saving measures, there were installed the absorptional and freonic air dryers.
365,7 thousand LTL have been invested into the technical support of production. These funds were used for implementation of necessary equipment,such as: voltage stabilizer, plasticsscrap breaker, refrigerant charging board, new safety system, and for replacement of worn out production tools and instruments.
Logistics and service Department used for improvement of its equipment 155,3 thousand LTL in 2012. There was introduced a new bar code reader and fulfilled program of warehouses modernization.
In 2012 was made an upgrading of informational technologies and equipment in the Company, it was spent 68,7 thousand LTL for it.
It was placed 2.557,3 thousand LTL into realization of investment programs within 2011.
Including the partial funding ofstructural funds of EU for the project"Strengthening of AB"Snaige" competitive ability by investing to the development of new generation"3D frost" refrigeratorseries", for what in 2011 wasreceived 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;
A++ energy efficiency class refrigerators RF36 and RF39;
Refrigerator RF35 A+ and A++ energy efficiency classes;
Single compartment refrigerator C29;
Freezer F22.
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.
For 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:
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.
Products produced by AB "Snaigė" are in accordance with requirements of EU Directives and regulations and appliances contain any substance banned under following Directives and regulations:
AB "Snaigė" products comply with above mentioned requirements and as evidence there are issued Test reports of the laboratory "DEKRA" (Germany) and Chemical Testing Division of National Public Health surveilance Laboratory (Lithuania).
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.
Macroeconomic Risk. The economy of Lithuania has been constantly growing and the foreign trade continious to be highly beneficial to that. As a result, private consumption is expected to grow in 2013 about asfar asit grew in 2012 withoutslowing down. According to market prognosis, the private consumption willstart growing more rapidly in later years when the external and domestic demand will increase and will rise household incomes. Upside risk is associated with global commodity prices:significant fluctuations are expected what would mostly affect relevant to the outside prices in Lithuania (food, fuel and administration prices).
At present both Lithuanian and global markets feel the effects of the economic and consumption recuperation but thisrecuperation is notso 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 financialsituation, the Company will have possibility to take short and long term credits for its operations.
Company's Financial Accounting Accuracy Risk. On 25 April 2013 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 changesin foreign trade policies of third countries could aggravate export conditionsto those countries. Any such change would negatively impact export opportunitiesfor the company and its financial situation.
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 changesin existing environmental requirements and restrictionsthe company might need additional investmentsto 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 2012.
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.
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.
The Audit Committee supervises preparation of the consolidated financialstatements,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 isresponsible for the preparation supervision and the final revision of the consolidated financialstatements. Moreover, he constantly reviewsInternational Financial Reporting Standards (IFRS), as adopted by European Union in order to implement in time IFRS changes, analyses Company's and group'ssignificant deals, ensures collecting information from the group's Companies and timely and fair preparation of thisinformation for the financialstatements. CFO of the Company periodically informsthe Board about the financial statements preparation process
22
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 42 branch and 9 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:
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:
AB"Snaigė"is a member and the founder of the Association of Domestic Equipment Manufacturers" CE CED Lithuania". The goals of the association are asfollows: 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.
C
o n s o li d a te d a n n u a l R ep o R t 2012
The Company's activities are independent of patents or licences
Recent important events in the Company's business
Based upon (unaudited unconsolidated) 2012 results Snaigė AB grew sales to more than 150 mln LTL in 2012 which is 31 percent higher than the same period last year. The Company generated 4.6 mln LTL (unaudited unconsolidated) profit which is almost 5 times more than for the last year. EBITDA (unaudited unconsolidated) for 2012 exceeded 13 mln LTL, which is 39 percent higher than for the last year.
Thissignificant increase in turnover and EBITDA wasreached due to successful export operations of carried out by the company. In 2012 Snaigė AB sold products to 33 European and Asian countries, export increased by 35 percent, and were 97 percent of total company sales.
For achievementsin the field of export Snaigė AB wasrecognized as"The Exporter of 2012"and awarded the prize of Lithuanian Chamber of Commerce, Industry and Crafts.
"It is quite difficult to compete with worldwide giants in of the market for home appliances," – states CEO G. Čeika."However, the results of Snaigė AB in 2012 demonstrate that it is possible". According to G. Čeika the results are driven by several factors – high-quality product,successful marketing and sales policy, flexibility and reliability of the company."
AB"Snaigė" success is in connection with the company interrelation with the Russian business group"Polair" . First of all the company obtained more confidence taking strategic decisions, such us development of– Snaige Glassy, premium design line of refrigerators, marketing campaign in Ukraine and Moldova, which has tremendous success in terms of sales volume and market share growth.
With the help of"Polair" the company in year 2012 produced and sold 4,9 thousand. commercial refrigerators in Russian market. AB Snaige, being a part of"Polair"group, achieved tangible cost optimization on purchasing some row materials and components.
"In 2012 the company accomplished a lot by creating new products and improving the existing ones,"- says G. Čeika. At the beginning of the year we improved refrigerators"Snaigė Ice Logic", implemented new technologies such as"Touch screen" electronic control,"Air Active", air circulation system,"0̊C Fresh Zone" section, presented several new models of freezers.. These refrigerators received positive responses from the customers both in Lithuania and Western and Easter Europe.
In 2012 Snaigė AB invested 2 mln LTL to the development of new products and improvement of existing ones. Total investment of the company reached 3 mln LTL.
According to unaudited unconsolidated data Snaigė AB reached 146.5 mln LTL of unaudited consolidated turnover and generated 1 mln LTL of unaudited consolidated net profit in 2012.
In the first 9 months of 2012 AB"Snaige"reached almost 21% higher turnover (unaudited, unconsolidated results) than the same period last year at more than LTL 112.8 m.
EBITDA (unaudited unconsolidated) in the nine months was also 24% higher than the previous year and exceeded LTL 9.7 m. The company also generated LTL 3.2 m. unaudited, unconsolidated profit which is 6 times more than the same period last year.
According to Gediminas Čeika, CEO, these results were achieved by a focus in the main on the more profitable markets with particularsuccessin Ukraine where sales were ahead by 56% compared with the previous year for the same period.
"This development was caused by a number of factors"-says G. Čeika -"the first isthe national advertising campaign in Ukrainian. In addition, we started to work with few significant Ukrainian home appliances and the regional wholesaler."
The successful marketing campaign in Ukraine has not only grown the sales, but also significantly strengthened Snaige's brand position in this market. In September we held 6.8% of the refrigerators category in the Ukrainian market and are now one of the market leaders.
"We also achieved strong results in Germany, during the first nine months of this year. The company has exported over 20,000 refrigerators"-said G. Čeika –"Part of this growth was due to the trade with"Severin"and a new client"Bomann".
The company has worked successfully in other European marketstoo. For example,salesin Poland grew by 8%, 7% to the Czech Republic, Hungary - 9%.
AB Snaige CEO G. Čeika welcomesthe results of the Q3."I am proud of the AB Snaige achievements and our team work. Our goal is to keep achieved sales and profitable results. We are already planning next year's investment programmers, trade and marketing strategies.We will focus on our customers.We will introduce a number of new products, new features, and properties".
Snaigė AB, the address of head office Pramonės str. 6, Alytus, the company code 249664610 (hereinafter, the "Company").
On 16 August 2012 the Extraordinary General Meeting of Shareholders of the Company took place. The following decisions were adopted during the meeting:
To revoke Martynas Česnavičius and Robertas Beržinskas from the Board members of the Company.
To elect Dmitry Komissarchik as the member of the Board for remaining term of this Board office
During the first half of 2012 turnover reached nearly 67m. Lt (unaudited, unconsolidated results) which is almost 19% more than in the same period last year. Also the company generated 419k Lt unaudited, unconsolidated profit which is 16% more than the same period last year. Unaudited unconsolidated EBITDA in the first half exceeded the 4,9 mln. Lt i.e. 16% more than during the same period last year.
According to Gediminas Čeika, these results were achieved by a focus in the main on the more profitable markets with particularsuccessin Ukraine where sales were ahead by 62% compared with the previous year for the same period."This development was caused by a number of factors ",-says G. Čeika," the first is the national advertising campaign on Ukrainian TV, Internet and outdoor advertising. We not only remind the user about ourselves, but also we enhance our customers ' confidence in us in Ukraine
The successful marketing campaign in Ukraine has not only grown the sales, but also significantly strengthened AB Snaige's brand position in this market. We now hold 6,2% of the refrigerators category in the Ukrainian market and are now one of the market leaders.
AB Snaige also found additional clientsin Asian markets. During the first 6 months of this year to exportsalesto Uzbekistan, Tajikistan and Kazakhstan exceeded 8000 PCs. of refrigerators, which is 35% more than last year. Users in these countries, in particular, value the quality of the Lithuanian refrigerators and the European origin. "We also achieved strong results in Germany, during the first half of this year. The company has exported over 14 000 refrigerators, 16% above with the same period last year.- said G. Čeika. –" Part of this growth was due to the trade with a new client"Bomann".
According to G. Čeika the trade with Russia is also recovering."Compared with the previous year to Russia we sold more than six times as many refrigerators. Of course, the majority of refrigerators were sold with the help of our partner company Russian industrial refrigeration equipment manufacturer "Polair".
AB Snaige CEO G. Čeika welcomes the results of the H1."19% sales growth is a great result", - said G. Čeika."However we are going ahead. The cultivation of profitable salesis one of the most important objectives of the company of the year.
On 16 August 2012 the Extraordinary General Meeting of Shareholders of Snaigė AB, the address of head office Pramonėsstr. 6, Alytus, the company code 249664610 (hereinafter, the"Company") is convened (hereinafter, the "Meeting").
The place of the meeting – the meeting hall of the Company, at the address Kareiviu str. 6 (fifth flour), Vilnius, Lithuania.
The Meeting commences – at 10 a.m. (registration starts at 9.45 a.m.).
The Meeting's accounting day – 8 August 2012 (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.
1 agenda question: The revocation of the Board members of the Company
2 agenda question: The appointment of the new Board members of the Company
On 6 June 2012 Snaigė AB received a report from its shareholder VAIDANA, UAB on the implementation of the mandatory non-competitive tender offer.
Through the implementation period of the tender offer, VAIDANA, UAB bought-up 12,379,525 ordinary registered shares of Snaigė AB, with nominal value of LTL 1 each (ISIN code LT0000109274), which represent 31.24 percent voting rights at the general meeting of shareholders of the company.
Snaige, AB received a notification from VAIDANA, UAB about crossing the threshold of 75 per cent of votes at the General Meeting of the Company's shareholders.
C
o n s o li d a te d a n n u a l R ep o R t 2012
Snaige AB has received notification on the transaction in issuer's securities concluded by the person closely associated with the manager of the issuer.
2012-05-30
Snaige AB hasreceived notification on the transaction in issuer'ssecurities concluded by the manager ofthe issuer. 2012-05-29
On 24th of May, 2012 the Articles of Association of Snaige AB (which was approved by shareholders on 30 April, 2012 shareholders meeting) was registered on Register of Legal Entities. 2012-05-11
In Q1 2012 AB Snaige has had a strong overall sales performance well ahead of their key markets and has matched 2011 sales value with revenues of 22m LTL (unaudited, unconsolidated results)."With some of our key markets affected in the short term by the economic downturn this has been an excellent result"-said CEO Gediminas Čeika.
According to Gediminas Čeika these results was achieved by a focus in the main on the more profitable Baltic and Eastern markets with particularsuccessin Ukraine where sales were ahead by 36% compared with the previous year for the same period."However, the company also had a successful result from selected western markets and in particular in Germany where sales increased by 30%, partly helped by sales to a new customer "Bomann", which is famous home appliance brand in Germany",- said G. Čeika.
Also in Q1 AB"Snaigė" gained the first benefits of the link with Russian industrial refrigerators producer"Polair". With the help of"Polair"the company produced and sold 3600 units of commercial refrigerators, which is double compared at the same period last year. Additionally the two companies are working closely together using their corporate procurement specialists to focus on optimization of corporate procurement to save on raw materials and on parts for the production process.
Gediminas Čeika said,-"We are satisfied with the results of Q1 and have delivered against the sales targets we set for the quarter. Additionally we focused on developing new products and preparation for the summer season."
In the second and third quarter of this year, AB Snaige is preparing to deliver updated series of"Snaigė Ice Logic" refrigerators to maximize its results. These new products have a refreshed internal design and new technologies such as dynamic cooling system, zero zone, and the electronic control which company believes it will delight its consumers.
In order to further strengthen the delivery of these products in Ukraine, the company is going to launch a national advertising campaign on TV, Internet and outdoor media channels.
Finally during Q1 AB"Snaigė" refinanced it's short term loan portfolio onto long-term loans with the aim of maximizing the benefits from the loan portfolio.
Unaudited unconsolidated EBITDA profit of the company in the first quarter of 2012 exceeded the LTL 583 thousand.
The General Meeting of shareholders of Snaige AB was held on 30 April 2012. The meeting heard the consolidated annual report of the Company for the year 2011 and the Auditor's report for the year 2011. At the meeting was made following resolutions:
THE AGENDA QUESTION: Consolidated annual report of"Snaigė"AB on the company's activity for 2011. In the meeting taken for information the consolidated annual report of"Snaigė"AB on the company's activity for 2011.
THE AGENDA QUESTION: Auditor's conclusion on the company's financial statements for 2011.
In the meeting taken for information with the auditor's conclusion on the company's financial statements for 2011.
THE DECISION: To approve the set of financialstatements of the company for 2011 (enclosed Snaigė AB and consolidated statements).
THE DECISION:
To approve the distribution of profit (loss) of"Snaigė"AB for 2011:
Non-distributed profit (loss) at the end of the last financial year: LTL 0 (EUR 0)
Net result - profit (loss) of financial year: LTL 908,126 (EUR 263,011.47)
Distributable result- profit (loss) of financial year: LTL 908,126 (EUR 263,011.47)
Contributions of shareholders to cover loss: LTL 0 (EUR 0)
Share premium for covering of loss LTL 0 (EUR 0)
Transfers from reserves: LTL 1,188,483 (EUR 344,208.47)
Distributable profit: LTL 2,096,609 (EUR 607,219.94)
Distribution of profit:
Portion of profit allocated to reserves foreseen by law: LTL 45,410 (EUR 13,151.65) Portion of profit allocated to other reserves: LTL 30,000 (EUR 8,688.60)
for support and charity 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)
Other: LTL 2,021,199 (EUR 585,379.69)
portion of profit allocated to reserve for acquisition of own shares: LTL 0 (EUR 0)
portion of profit allocated to reserve for investments: LTL 2,021,199 (EUR 585,379.69)
Non-distributed result - profit (loss) at the end of financial year: LTL 0 (EUR 0)
THE DECISION: For 2012 auditing purposes of annual financialstatementsto elect UAB"Ernst &Young Baltic". To authorize (with the right to delegate) the General Director of the company to sign the agreement with the audit firm by establishing the terms of payment for the audit services and other terms.
THE DECISION: Until the end of term of the Company's Board To elect the chairman of audit committee Anton Kudryashov, as the members of Audit Committee Virginijus Dumbliauskas and Rasa Balčiūnaitė Kaminskienė. 7. THE AGENDA QUESTION: Amending the Articles of Association of the Company
THE DECISION:
1) To amend Clauses 6.2 and 6.3 of the Articles of Association of the Company to be read as follows:
6.2. The convening and the powers of the General Meeting of Shareholders shall conform to the procedures of convening and the powers of the General Meeting of Shareholdersstipulated in the Law on Companies, except where these Articles of Association provide otherwise.
6.3. The General Meeting of Shareholders shall elect and remove the Board of the Company in compliance with the procedure prescribed by the Law on Companies. The Board of the Company shall have the right to adopt a decision on issuing debentures, as well as, following the procedure approved by the General Meeting of Shareholders, to resolve the mattersrelated to the establishment of remuneration to the Board members. The Board's powers with regard to other mattersshall conform to the powersstipulated in the Law on Companies. The working procedure of the Board shall be laid down in the rules of procedure of the Board.
To supplement the Articles of Association of the Company with Clause 6.5 to be read as follows:
6.5. The members of the Board of the Company shall enter into agreements on their activity within the Board. Remuneration may be paid to the Board members of the Company for their activity within the Board of the Company. The General Meeting of Shareholders of the Company shall approve the form of the agreement with the Board members of the Company and the procedure for payment of remuneration by the Company for the activity of the Board members.
2) In the light of the said amendments of the Articles of Association of the Company, to approve the new wording of the Articles of Association of the Company (enclosed). To authorize (with the right to subdelegate) the head of the Company to sign the new wording of the Articles of Association of the Company and to submit it for registration with the Register of Legal Entities.
THE AGENDA QUESTION: Approving the procedure for payment of remuneration by the Company for the activity of the members of the Board and the form of the agreement with members of the Board of the Company THE DECISION:
1) To establish that according to the respective decision of the Board of the Company remuneration may be paid to the Board members of the Company for their activity within the Board.
To establish that the adopted decisions referred to in Clauses 1), 2) and 3) hereof, relating to the establishment of the remuneration to the Board members of the Company for their activity within the Board, shall come into force and shall be applied after the registration of the new wording of the Articles of Association of the Company as approved by this General Meeting of Shareholders with the Register of Legal Entities. 2012-04-25
The Board of Snaigė AB on 25 April 2012 adopted the decision to approve April 30th 2012 the ordinary general meeting of Company'sshareholders additions of the draft decisions of the 5th and 6th questions of the meeting agenda:
The decision project of the 5th agenda question:"For 2012 auditing purposes of financial statements to elect UAB"Ernst &Young Baltic". To authorize (with the right to delegate) the General Director of the company to sign the agreement with the audit firm by establishing the terms of payment for the auditservices and other terms". The decision project of the 6th agenda question:"Until the end of term of the Company's Board to elect Virgini-
27
jus Dumbliauskas and Rasa Balciunaite Kaminskiene. Anton Kudryashov to elect the chairman of the audit committee".
2012-04-19
The addition of agenda of the ordinary General Meeting of Shareholders
AB Snaige Board by its decision, adopted on 16 April 2012, decided to supplement agenda of the Ordinary General Shareholders Meeting of the Company by item No. 7 and No. 8:
7 question of agenda: Amending the Articles of Association of the Company.
8 question of agenda: Approving the procedure for payment of remuneration by the Company for the activity of the members of the Board and the form of the agreement with members of the Board of the Company.
Drafts of decisions of additional agenda questions of the Ordinary General Meeting of Shareholders are attached.
The ordinary 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") on 30 April 2012.
The place of the meeting – main meeting hall of the Company, at the address Pramonėsstr. 6, Alytus, Lithuania. The Meeting commences – at 10.00 a.m. (registration starts at 9.45 a.m.).
The Meeting's accounting day – 23 April 2012 (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:
Consolidated Annual report of"Snaigė"AB on the company's activity for 2011.
On 30 April 2012 the ordinary 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 Pramonėsstr. 6, Alytus, Lithuania. The Meeting commences – at 10.00 a.m. (registration starts at 9.45 a.m.).
The Meeting's accounting day – 23 April 2012 (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:
Election of members of Audit Committee.
2012-03-22
The Board of Snaige AB having familiarised itself with the mandatory non-competitive tender offer material presented to it by the offeror UAB"Vaidana", in its meeting held on 21 March 2012 approved the opinion about the submitted mandatory non-competitive tender offer to buy shares of the company.
On 15 March 2012, Snaigė AB received an announcement from the shareholder UAB"VAIDANA"about 15 March, 2012 the decision of the Bank of Lithuania 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 0.54 (fifty four euro cents) per 1 (one) ordinary registered share of Snaigė AB, LTL 1 (one litas) par value (ISIN code LT0000109274) each. Commencement of the implementation of the tender offer is on 21 March 2012, termination – on 29 May 2012.
On 5 March, 2012 Snaige AB hasreceived notifications on the transactionsin issuer'ssecurities concluded by the person closely associated with the manager of the issuer.
For AB"Snaigė" 2011 became a year ofsignificant 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 appliancesretailers – "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 hasseveral positive achievements which will have a positive effect on the future of the business. The most important one wasintroduction ofstrategic 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 allshares 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 debtsfrom the closed factory in Kaliningrad. For these reasonsthe 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.
| PRINCIPLES/ RECOMMENDATIONS Principle I: Basic Provisions |
YES/NO /NOT APPLICABLE |
COMMENTARY |
|---|---|---|
| The overriding objective of a companyshould be to operate in common interests of all the shareholders by optimizing over time shareholdervalue. | ||
| 1.1. a companyshouldadoptandmakepublic thecompany'sdevelopment strategy and objectives by clearly declaring how the company intends to meet theinterestsof its shareholdersandoptimizeshareholdervalue. |
Yes | theCompany'sbusiness strategyis listedin theannual report,partlyin the annualaccount,as wellas in somepress reports.theCompany'spublished materialeventsandannouncementstoinvestorsalsoreflect theCompany's policy. |
| 1.2. all managementbodiesofacompany shouldact in furtheranceof the declared strategic objectives in view of the need to optimize shareholder value. |
Yes | theoperational strategyof theCompanyisconsideredandapprovedbythe Board of the Company; the strategy targets the need to ensure profitable performance with an ultimateview toincreasetheshareholders'equity. |
| the compliance with theprovisions of the Company's operational strategy is supervisedbythe Managerof theCompany. |
||
| 1.3. a company's supervisory and managementbodies shouldact in close co-operation in order to attain maximum benefit for the company andits shareholders. |
not appliCaBle | theCompany has not formedthesupervisory Board. |
| 1.4. a company'ssupervisoryandmanagementbodiesshouldensurethatthe rightsandinterestsofpersonsother than thecompany's shareholders (e.g. employees, creditors, suppliers, clients, local community),participatingin or connected with thecompany'soperation,aredulyrespected. |
Yes | Company managementbodies seekingto ensure that allpersons who are participatingin Company'sactivityorpersonsrelatedwith Company'sactiv ityrightsandinterestwillberespected.the Boardof theCompanymonitors andassesses theperformanceofCompanyand theCompany's Managerby analyzingthe financialstatementsubmittedbytheCompany'sManager,also theorganization of theactivities,dataon thechanges in equity |
| Principle II:The corporate governance framework | The corporate governance framework should ensure the strategic guidance of the company, the effective oversight of the company's management | |
| bodies, an appropriate balance and distribution of functions between the company's bodies, protection of the shareholders' interests. | ||
| 2.1. Besidesobligatorybodiesprovidedfor in thelaw on Companiesof the Republicoflithuania – ageneralshareholders'meetingandthechiefexec utiveofficer, it is recommendedthatacompanyshouldsetupboth acolle gial supervisorybody anda collegial managementbody.the settingupof collegialbodiesforsupervision andmanagement facilitatesclearseparation of management andsupervisory functions in the company, accountability andcontrolon thepartof thechiefexecutiveofficer,which, in itsturn, facil itatea moreefficientandtransparent managementprocess. |
Yes | thecollegial managementbody – the Boardiselectedbyshareholders. upon thedecision of theshareholderssinceMay2006thesupervisory Board is not formed. |
| 2.2. a collegial managementbodyis responsiblefor thestrategic manage mentof thecompanyandperformsotherkeyfunctionsof corporategover nance. a collegialsupervisorybodyisresponsiblefortheeffectivesupervision of thecompany's managementbodies. |
Yes | the Boardof theCompanyisresponsiblefor theformation of theCompany's operational strategy, organization of the enforcement thereof, the repre sentation andtheprotection of theshareholder's interest. |
| 2.3.Whereacompanychooses toform onlyonecollegialbody, it is recom mendedthat it shouldbeasupervisorybody, i.e. thesupervisoryboard. in such acase, thesupervisoryboardisresponsiblefor theeffectivemonitoring of thefunctionsperformedbythecompany's chiefexecutiveofficer. |
no | the Boardisformedin theCompany(upon theshareholders'decision ofMay 2006). |
| 2.4.thecollegial supervisorybody tobeelectedby thegeneral sharehold ers'meetingshouldbesetupandshouldact in themannerdefinedin prin ciples iii and iV. Where a company should decide not to set up a collegial supervisory body but rather a collegial management body, i.e. the board, principles iiiandiV shouldapplytotheboardas longas thatdoes not con tradict theessenceandpurposeof thisbody. |
Yes | theseprinciplesapplytothe Boardtotheextent theydo not contradict the essenceandthepurposeof the Board. |
| 2.5.Company's managementandsupervisorybodies shouldcomprisesuch number ofboard(executivedirectors) andsupervisory (non-executivedi rectors)boardmembersthat noindividualorsmallgroupof individualscan dominatedecision-makingon thepartof thesebodies. 2 |
Yes | therearesix Membersof the Boardandin theopinion of theshareholders this is sufficient. |
| 2.6. non-executivedirectorsormembersof thesupervisoryboardshouldbe appointedforspecifiedtermssubject toindividual re-election,atmaximum intervalsprovidedfor in thelithuanian legislation with aview toensuring necessarydevelopmentofprofessionalexperienceandsufficientlyfrequent reconfirmation of their status. a possibility toremove them shouldalsobe stipulated however this procedure should not be easier than the removal procedureforan executivedirectororamemberof themanagementboard. |
no | upon thedecision of theshareholderssinceMay2006thesupervisory Board is not formed. |
1 provisionsofprinciplesiiiandiV aremoreapplicabletothoseinstanceswhen thegeneralshareholders'meetingelectsthesupervisoryboard, i.e.abodythat isessentiallyformedtoensureoversightof thecompany'sboard andthechiefexecutiveofficerandtorepresent thecompany's shareholders. However, in casethecompanydoes not form thesupervisoryboardbut rather theboard, mostof therecommendations setout in principles iii andiV becomeimportantandapplicabletotheboardas well.Furthermore, it shouldbe notedthat certain recommendations, which arein theiressenceand natureapplicableexclusivelytothesupervisoryboard, should notbeappliedtotheboard,asthecompetenceandfunctionsof thesebodiesaccordingtothelaw on Companiesof the Republicoflithuania(official Gazette,2003, no123-5574)aredifferent.For instance, item3.1of the Codeconcerningoversightof themanagementbodiesapplies totheextent it concerns theoversightof thechiefexecutiveofficerof thecompany,but notof theboarditself; item4.1of theCodeconcerningrecommendations tothemanagementbodiesapplies totheextent it relates totheprovision of recommendations tothecompany's chiefexecutiveofficer; item4.4of theCodeconcerningindependenceof thecollegialbodyelectedby thegeneral meetingfrom thecompany's managementbodies isappliedtotheextent it concerns independencefrom thechiefexecutiveofficer.
2 definitions'executivedirector'and'non-executivedirector'areusedin cases when acompany hasonlyonecollegialbody.
2.7. Chairman of the collegial body elected by the general shareholders' meetingmaybeaperson whosecurrentorpastofficeconstitutes noobstacle to conduct independent and impartial supervision. Where a company shoulddecide not to setupa supervisoryboardbut rather theboard, it is recommendedthat thechairman of theboardandchiefexecutiveofficerof the company shouldbe adifferentperson. Former company's chief executiveofficershould notbeimmediately nominatedasthechairman of thecollegialbodyelectedbythegeneral shareholders'meeting.When acompany chooses todeparturefrom theserecommendations, it shouldfurnish information on themeasuresit hastaken toensureimpartialityofthesupervision.
theChairman of theCompany is not and has notbeen the Managerof the Company. Yes
| 3.1.the mechanism of the formation of a collegialbody tobe electedby a generalshareholders'meeting(hereinafter in thisprinciplereferredtoasthe 'collegial body') should ensure objective and fair monitoring of the com pany's management bodies as well as representation of minority share holders. |
Yes | thecollegialmanagementbody – the Boardiselectedin thegeneralmeet ing of shareholders according the law of lithuanian republic. Besidesthe candidatestotheMembersof the Boardintroducethemselvestotheshare holders,providinginformation of thepositions they holdin other compa niesandtheirprofessionalqualifications. |
|---|---|---|
| 3.2. namesandsurnamesof thecandidates tobecomemembersofacolle gialbody, information abouttheireducation,qualification,professionalback ground,positionstaken andpotentialconflictsof interestshouldbedisclosed early enough before thegeneral shareholders'meetingso that the share holderswould havesufficient timetomakean informedvotingdecision. all factors affectingthe candidate's independence, the sample list of which is setout in Recommendation 3.7,shouldbealsodisclosed.thecollegialbody shouldalsobeinformedon any subsequent changes in theprovidedinfor mation.the collegialbody should,on yearlybasis, collectdataprovidedin this item on its membersanddisclosethis in thecompany'sannual report. |
Yes | theshareholdersata Generalshareholders'Meeting(when Boardmembers areelected)areintroduced with workexperience,education, theother im portant information of the candidates for the Board which Company gets about the Board members. |
| 3.3. should a person be nominated for members of a collegial body, such nomination shouldbe followedby thedisclosure of information on candi date's particular competences relevant to his/her service on the collegial body. in ordershareholdersandinvestorsareabletoascertainwhethermem ber'scompetenceisfurther relevant, thecollegialbodyshould, in itsannual report,disclose the information on its composition andparticular compe tencesof individualmembers which arerelevant totheir serviceon thecol legialbody. |
Yes | as candidates for the Board members introduce themselves for the share holders, andthe shareholders while electingtheboard members have the opportunity todecide about the candidates competence andsuitability to representshareholdersinterests. in theCompanyannual report ispublished thecompetency(education,workexperience,workpositions)ofboardchair man andthecomposition of theboard. |
| 3.4in ordertomaintain aproperbalancein termsofthecurrentqualifications possessedbyitsmembers,thedesiredcomposition ofthecollegialbodyshall be determined with regard to the company's structure and activities, and have thisperiodically evaluated.the collegialbody shouldensure that it is composedofmemberswho,asawhole, havetherequireddiversityofknowl edge, judgmentandexperiencetocompletetheir tasksproperly.themem bers of the audit committee, collectively, should have a recent knowledge andrelevantexperiencein the fieldsof finance,accountingand/oraudit for thestockexchangelistedcompanies. at leastoneof themembersof there muneration committeeshould haveknowledgeofandexperiencein the field of remuneration policy. |
Yes | theCompany'sboardand auditCommitteemembers havesufficiencyofex perienceandskills, sufficiencyofknowledgetoperformtheirdutiesappro priately.shareholdersdecision toelectthemastheboardofdirectorsoraudit committee members is madeafter their readinessandcompetenceiseval uated. |
| 3.5. all new membersof thecollegialbody shouldbeofferedatailoredpro gramfocusedon introducingamember with his/herduties,corporateorgan ization andactivities.thecollegialbody shouldconductan annual review to identify fieldswhereitsmembers needtoupdatetheirskillsandknowledge. |
Yes | theCompanymakesopportunityfor theCompany's Boardmemberstotake alooktothecompany'sactivity, thus newlyelected membersof the Board is provided a sufficiency of knowledge and information. Board members' skillsandknowledgeareconstantlyupdated whiletheyperformancetheir functions,duringboard meetingsor individually. |
| 3.6. in order to ensure that all material conflicts of interest related with a memberof thecollegialbodyareresolvedproperly, thecollegialbodyshould 5 members. compriseasufficient numberof independent |
no | until now theindependenceof the membersof the Board has notbeen as sessed, andthe contentsof the conceptof "adequacy"of the independent membersof the Board has notbeen discussed. theCompany has not taken anydecision concerningtheimplementation of theseprovisions in thefuture. |
3 attention shouldbedrawn tothefact that in thesituation wherethecollegialbodyelectedbythegeneral shareholders'meetingis theboard, it is natural thatbeinga managementbodyit shouldensure oversight notofall managementbodiesof thecompany,butonlyof thesingle-person bodyof management, i.e. thecompany's chiefexecutiveofficer.this noteshallapplyin respectof item 3.1as well.
4 theCodedoes notprovideforaconcrete numberof independent members tocompriseacollegialbody. Manycodes in foreign countries fixaconcrete numberof independent members (e.g.at least1/3or 1/2of themembersof thecollegialbody) tocomprisethecollegialbody. However, havingregardtothe noveltyof theinstitution of independentmembersin lithuaniaandpotentialproblemsin findingand electingaconcrete numberof independent members, theCodeprovides fora more flexible wordingandallows thecompanies themselves todecide what numberof independent members is sufficient. of course,alarger numberof independent members in acollegialbodyisencouragedand will constitutean exampleof moresuitablecorporategovernance.
5 it is notablethat in somecompaniesall membersof thecollegialbody may,duetoaverysmall numberof minorityshareholders,beelectedbythevotesof the majorityshareholderorafew major shareholders. Buteven a memberof thecollegialbodyelectedbythe majorityshareholders maybeconsideredindependent if he/she meets theindependencecriteriasetout in theCode.
no
the Board has notdefinedtheconceptof independence.
nosuch practiceexists.
no
3.7. amemberof thecollegialbodyshouldbeconsideredtobeindependent onlyif heis freeofanybusiness, familyorother relationship with thecompany, its controllingshareholderor the managementofeither, that creates a conflict of interest such as to impair his judgment. since all cases when memberof thecollegialbodyis likelytobecomedependantareimpossible to list, moreover, relationships and circumstances associated with the determination of independence may vary amongst companies and the best practicesof solvingthisproblem areyet toevolvein thecourseof time,assessmentof independenceofamemberofthecollegialbodyshouldbebased on thecontentsof therelationshipandcircumstancesrather than their form. thekeycriteriafor identifying whethera memberof thecollegialbodycan beconsideredtobeindependentarethefollowing:
3.8.thedetermination of what constitutes independenceis fundamentally an issuefor thecollegialbodyitself todetermine.thecollegialbodymaydecide that,despite aparticular member meets all the criteria of independence laiddown in this Code, he cannotbe consideredindependentdue to specialpersonalor company-relatedcircumstances.
3.9. necessaryinformation on conclusions thecollegialbody hascometoin its determination of whether a particular member of the body should be consideredtobeindependent shouldbedisclosed.When aperson is nominatedtobecomea memberof thecollegialbody, thecompany shoulddisclose whether itconsiders theperson tobeindependent.When aparticular member of the collegialbodydoes not meet one or more criteria of independence setout in this Code, the company shoulddisclose its reasons for nevertheless consideringthe member tobe independent. in addition, the company shouldannuallydisclose which members of the collegialbody it considers tobeindependent.
until now theindependenceof the membersof the Board has notbeen assessed, andthe contents of the concept of"adequacy"of the independent membersof the Board have notbeen discussed.
theCompany has not taken anydecision concerningtheimplementation of theseprovisions in thefuture.
| 3.10. When one or more criteria of independence set out in this Code has not been met throughout the year, the company should disclose its reasons for considering a particular member of the collegial body to be independent. To ensure accuracy of the information disclosed in relation with the independ- ence of the members of the collegial body, the company should require in- dependent members to have their independence periodically re-confirmed. |
NO | No such practice or requirements existed. |
|---|---|---|
| 3.11. In order to remunerate members of a collegial body for their work and participation in the meetings of the collegial body, they may be remuner- ated from the company's funds. 6 The general shareholders' meeting should approve the amount of such remuneration. |
NOT APPLICABLE The renumeration to members of collegial body was approved by share- holders during ordinary meeting in 2012 year, but such practice not ap- plied yet. |
|
| Principle IV: The duties and liabilities of a collegial body elected by the general shareholders' meeting | The corporate governance framework should ensure proper and effective functioning of the collegial body elected by the general shareholders' meet- ing, and the powers granted to the collegial body should ensure effective monitoring 7 of the company's management bodies and protection of interests |
|
| of all the company's shareholders. | ||
| 4.1. The collegial body elected by the general shareholders' meeting (here- inafter in this Principle referred to as the 'collegial body') should ensure in- tegrity and transparency of the company's financial statements and the control system. The collegial body should issue recommendations to the com- pany's management bodies and monitor and control the company's man- agement performance. |
YES | These functions are performed by the Board elected by the general meeting of shareholders. The Board shall approve and submit to the general meeting of shareholders the annual report on the activities of the Company, finan- cial reports, evaluate the results of the business activities of the Company and assess the performance of the Manager of the Company. |
| 4.2. Members of the collegial body should act in good faith, with care and re- sponsibility for the benefit and in the interests of the company and its share- holders with due regard to the interests of employees and public welfare. Independent members of the collegial body should (a) under all circum- stances maintain independence of their analysis, decision-making and ac- tions (b) do not seek and accept any unjustified privileges that might compromise their independence, and (c) clearly express their objections should a member consider that decision of the collegial body is against the interests of the company. Should a collegial body have passed decisions in- dependent member has serious doubts about, the member should make ad- equate conclusions. Should an independent member resign from his office, he should explain the reasons in a letter addressed to the collegial body or audit committee and, if necessary, respective company-not-pertaining body (institution). |
YES | In performing their duties the members of the Board are guided by the in- terests of the Company and in behalf of Shareholders. |
| 4.3. Each member should devote sufficient time and attention to perform his duties as a member of the collegial body. Each member of the collegial body should limit other professional obligations of his (in particular any di- rectorships held in other companies) in such a manner they do not interfere with proper performance of duties of a member of the collegial body. In the event a member of the collegial body should be present in less than a half of the meetings of the collegial body throughout the financial year of the com- pany, shareholders of the company should be notified. |
YES | Members of the Board act in accordance with the Rules of Procedure of the Board and allocate sufficient time for the performance of their duties. |
| 4.4. Where decisions of a collegial body may have a different effect on the company's shareholders, the collegial body should treat all shareholders im- partially and fairly. It should ensure that shareholders are properly informed on the company's affairs, strategies, risk management and resolution of con- flicts of interest. The company should have a clearly established role of mem- bers of the collegial body when communicating with and committing to shareholders. |
YES | There haven't been any cases of the conflict of interests between the share- holders and the Board. The Company has put in place the procedure of the provision of information to the shareholders in accordance with the Law on Companies, and this has been provided in the Articles of Association of the Company. |
| 4.5. It is recommended that transactions (except insignificant ones due to their low value or concluded when carrying out routine operations in the company under usual conditions), concluded between the company and its shareholders, members of the supervisory or managing bodies or other nat- ural or legal persons that exert or may exert influence on the company's man- agement should be subject to approval of the collegial body. The decision concerning approval of such transactions should be deemed adopted only provided the majority of the independent members of the collegial body voted for such a decision. |
NOT APPLICABLE | The Company's management bodies transactions concluding and approving acting in behalf of Company according Lithuanian Law and articles of Com- pany. |
| 4.6. The collegial body should be independent in passing decisions that are significant for the company's operations and strategy. Taken separately, the collegial body should be independent of the company's management bod- ies. Members of the collegial body should act and pass decisions without an outside influence from the persons who have elected it. Companies should ensure that the collegial body and its committees are provided with suffi- cient administrative and financial resources to discharge their duties, |
YES | Since the collegial management body - the Board is elected by the General Meeting of Shareholders, in its decision making function the Board is inde- pendent from the Manager of the Company. The Company's Management ensures that the collegial body and its committees are provided with suffi- cient resources to carry their duties. |
6 it is notablethat currentlyit is notyet completelyclear, in what form membersof thesupervisoryboardor theboard mayberemuneratedfor their workin thesebodies.thelaw on Companiesof the Republicoflithuania(official Gazette,2003, no123-5574)provides that membersof thesupervisoryboardor theboard mayberemuneratedfor their workin thesupervisoryboardor theboardbypaymentofannualbonuses (tantiems) in the mannerprescribedby article59of this law, i.e. from thecompany'sprofit.thecurrent wording, contrarytothe wordingeffectivebefore1January2004,eliminates theexclusiverequirement thatannualbonuses (tantiems) shouldbetheonlyformof thecompany's compensation tomembersof thesupervisoryboardor theboard.soit seems that thelaw contains noprohibition toremuneratemembersof thesupervisoryboardor theboardfor their workin other forms,besidesbonuses,although thispossibilityis notexpresslystatedeither. 7 seeFootnote3.
8 seeFootnote3. in theevent thecollegialbodyelectedbythegeneralshareholders'meetingistheboard, itshouldproviderecommendationstothecompany'ssingle-person bodyofmanagement, i.e. thecompany'schief executiveofficer.
9 it is notablethat companies can makethis requirement morestringentandprovidethat shareholders shouldbeinformedabout failuretoparticipateat the meetingsof thecollegialbodyif, for instance,a memberof the collegialbodyparticipatedat less than 2/3or3/4of the meetings.such measures, which ensureactiveparticipation in the meetingsof thecollegialbody,areencouragedand will constitutean exampleof moresuitable corporategovernance.
33
| cludingtheright toobtain, in particular fromemployeesof thecompany,all the necessary information or toseek independent legal,accountingorany other advice on issuespertainingto the competence of the collegialbody andits committees.When usingtheservicesofaconsultant with aview to obtaininginformation onmarketstandardsfor remuneration systems,there muneration committee shouldensure that the consultant concerneddoes notat thesametimeadvicethe human resourcesdepartment,executivedi rectorsor collegial managementorgansof thecompanyconcerned. |
||
|---|---|---|
| 4.7. activitiesof thecollegialbodyshouldbeorganizedin amanner that in dependentmembersof thecollegialbodycould havemajor influencein rel evantareaswherechancesofoccurrenceofconflictsof interestarevery high. such areas tobe consideredas highly relevant are issues of nomination of company'sdirectors,determination ofdirectors' remuneration andcontrol andassessmentofcompany'saudit.thereforewhen thementionedissuesare attributabletothecompetenceof thecollegialbody, it isrecommendedthat the collegial body should establish nomination, remuneration, and audit committees.Companiesshouldensurethat thefunctionsattributabletothe nomination, remuneration,andaudit committeesarecarriedout. However they maydecideto mergethesefunctionsandsetupless than threecom mittees. in such caseacompanyshouldexplain in detail reasonsbehindthe selection of alternative approach and how the selectedapproach complies with theobjectives set forth for thethreedifferent committees.shouldthe collegialbodyof thecompanycomprisesmall numberofmembers, thefunc tions assignedtothe three committees maybeperformedby the collegial bodyitself,providedthat it meets composition requirementsadvocatedfor thecommitteesandthatadequateinformation isprovidedin thisrespect. in such caseprovisionsof thisCoderelatingtothecommitteesof thecollegial body (in particular with respect totheir role,operation, andtransparency) shouldapply, whererelevant, tothecollegialbodyasa whole. |
Yes | the auditCommittee waselectedin 2009.Companyon 14 december,2011 duringshareholders meetingrevokedthe audit committee in corpore.the newauditcommitteewillbeelectedduring nextshareholdersmeeting.the Company's directors nomination and remuneration committees are not formed.thefunctionspointedatthisitemstillareimplementedbythe Board within its jurisdiction. if theshareholdersaccept thedecision toestablish such committeesor it is requiredbythelaw of the Republicof lithuania, thecommittees wouldbe established. |
| 4.8.the keyobjectiveof the committees is toincrease efficiencyof the ac tivitiesof thecollegialbodybyensuringthatdecisionsarebasedon duecon sideration, andto helporganize its work with a view to ensuringthat the decisionsit takesarefreeofmaterialconflictsof interest.Committeesshould exerciseindependent judgementandintegritywhen exercisingitsfunctions as wellaspresent thecollegialbody with recommendationsconcerningthe decisions of the collegial body. nevertheless the final decision shall be adoptedbythecollegialbody.therecommendation on creation ofcommit teesis not intended, in principle, toconstrict thecompetenceof thecollegial bodyor toremovethematters consideredfromthepurview of thecollegial bodyitself,which remainsfullyresponsiblefor thedecisionstaken in its field of competence. |
Yes | theCompany's collegiatebodiesareindependentand makeself-contained decisions not influencedbyanyconflictsof interestandremain responsible fordecisions which areawardedin limitsof theirability. |
| 4.9.Committeesestablishedbythecollegialbodyshould normallybecom posedofat least threemembers. in companies with small numberofmem bers of the collegial body, they could exceptionally be composed of two members.Majorityofthemembersofeach committeeshouldbeconstituted fromindependentmembersofthecollegialbody. in caseswhen thecompany chooses not tosetupasupervisoryboard, remuneration andauditcommit tees shouldbeentirelycomprisedof non-executivedirectors.Chairmanship andmembershipofthecommitteesshouldbedecidedwith dueregardtothe needtoensurethatcommitteemembershipisrefreshedandthatunduere liance is notplacedon particular individuals. Chairmanshipand member shipof the committees shouldbedecided with due regardto the needto ensurethat committee membershipis refreshedandthatunduerelianceis notplacedon particular individuals. |
Yes | thecompany have not renumeration committee.the auditCommitteecon sistsof three members, which chairman waselectedin shareholders meet ingafterappreciation of his independencecriterion. |
| 4.10. authorityofeach of thecommittees shouldbedeterminedbythecol legialbody. Committees shouldperform theirduties in line with authority delegatedtothemandinformthecollegialbodyon theiractivitiesandper formanceon regularbasis. authorityofeverycommitteestipulatingtherole andrightsanddutiesof thecommitteeshouldbemadepublicat leastonce ayear (aspartof theinformation disclosedbythecompanyannuallyon its corporategovernancestructuresandpractices).Companiesshouldalsomake public annually a statementby existingcommittees on their composition, numberofmeetingsandattendanceover theyear,andtheirmain activities. auditcommitteeshouldconfirmthat it issatisfiedwith theindependenceof the auditprocess anddescribebriefly the actions it has taken toreach this conclusion. |
no | thepracticeof committees isbeingformed. |
| 4.11. in order toensureindependenceandimpartialityof thecommittees, membersofthecollegialbodythatare notmembersofthecommitteeshould commonly havearight toparticipatein themeetingsof thecommitteeonly if invitedbythecommittee. a committeemayinviteordemandparticipation in themeetingofparticularofficersorexperts.Chairman ofeach of thecom mitteesshould haveapossibilitytomaintain directcommunicationwith the shareholders.events when such aretobeperformedshouldbespecifiedin theregulations for committeeactivities. |
no | thepracticeof committees isbeingformed. |
10 in theevent thecollegialbodyelectedbythegeneral shareholders'meetingis theboard, therecommendation concerningits independencefromthecompany'smanagementbodiesapplies totheextent it relates totheindependencefrom thecompany's chiefexecutiveofficer.
4 . 1 2 . 1 . K e y f u n c t i o n s o f t h e n o m i n a t i o n c o m m i t t e e s h o u l d b e t h e fo l l o w i n g : • i d e n t i fy a n d r e c o m m e n d , fo r t h e a p p r o v a l o f t h e c o l l e g i a l b o d y, c a n d i d a t e s t o fi l l b o a r d v a c a n c i e s . t h e n o m i n a t i o n c o m m i t t e e s h o u l d e v a l u a t e t h e b a l a n c e o f s k i l l s , k n o w l e d g e a n d e x p e r i e n c e o n t h e m a n a g e m e n t b o d y, p r e p a r e a d e s c r i p t i o n o f t h e r o l e s a n d c a p a b i l i t i e s r e q u i r e d t o a s s u m e a p a r t i c u l a r o ffice,andassessthetimecommitmentexpected. nomination committeecan alsoconsidercandidates tomembersof thecollegialbodydelegatedbythe shareholdersof thecompany;
.
• assesson regularbasisthestructure,size,composition andperformanceof the supervisory and managementbodies, and make recommendations to thecollegialbodyregardingthe meansofachieving necessarychanges;
• assesson regularbasis theskills,knowledgeandexperienceof individual
directorsandreporton this tothecollegialbody; •properlyconsider issues relatedtosuccession planning;
• Review thepolicy of the managementbodies for selection andappoint mentof senior management.
4.12.2. nomination committeeshouldconsiderproposalsbyotherparties, in cluding management andshareholders.When dealing with issues related toexecutivedirectorsormembersof theboard(ifacollegialbodyelectedby thegeneralshareholders'meetingisthesupervisoryboard)andseniorman agement,chiefexecutiveofficerof thecompanyshouldbeconsultedby,and entitledtosubmitproposals tothe nomination committee.
4.13. Remuneration Committee.
4.13.1. Keyfunctionsoftheremuneration committeeshouldbethefollowing: •Makeproposals, for theapprovalof thecollegialbody,on theremuneration policy for members of management bodies and executive directors. such policyshouldaddressall formsof compensation, includingthe fixedremu neration,performance-basedremuneration schemes,pension arrangements, and termination payments. proposals considering performance-based re muneration schemesshouldbeaccompaniedwith recommendationson the relatedobjectivesandevaluation criteria,with aviewtoproperlyaligningthe payofexecutivedirectorandmembersof themanagementbodies with the long-term interestsof theshareholdersandtheobjectives setbythecolle gialbody;
• Makeproposals to the collegialbody on the individual remuneration for executive directors and member of management bodies in order their re munerations are consistent with company's remuneration policy and the evaluation of theperformanceof thesepersons concerned. in doingso, the committeeshouldbeproperlyinformedon thetotalcompensation obtained byexecutivedirectorsandmembersof themanagementbodiesfromtheaf filiatedcompanies;
•ensurethatremunerationofindividualexecutivedirectorsormembersofman agementbodyisproportionatetotheremuneration ofotherexecutivedirectors ormembersofmanagementbodyandotherstaffmembersofthecompany;
•periodicallyreviewtheremuneration policyforexecutivedirectorsormem bers of managementbody, includingthepolicy regardingshare-basedre muneration,andits implementation;
• Makeproposals tothecollegialbodyon suitableformsof contracts forex ecutivedirectorsand membersof the managementbodies;
• assist thecollegialbodyin overseeing howthecompanycomplieswith ap plicableprovisions regardingtheremuneration-relatedinformation disclo sure (in particular the remuneration policy applied and individual remuneration ofdirectors);
•Makegeneral recommendationstotheexecutivedirectorsandmembersof themanagementbodieson thelevelandstructureof remuneration forsen ior management (as defined by the collegial body) with regard to the re spective information provided by the executive directors and members of the managementbodies.
4.13.2.With respect tostockoptionsandothershare-basedincentiveswhich maybegrantedtodirectorsorotheremployees, thecommitteeshould:
• Consider general policy regarding the granting of the above mentioned schemes, in particular stockoptions,andmakeanyrelatedproposals tothe collegialbody;
•examinetherelatedinformation that isgiven in thecompany'sannual re portanddocuments intendedfor theuseduringtheshareholdersmeeting; •Makeproposalstothecollegialbodyregardingthechoicebetween granting options tosubscribe sharesorgrantingoptions topurchase shares, specify ingthereasonsfor itschoiceaswellastheconsequencesthatthischoice has. 4.13.3. upon resolution of theissuesattributabletothecompetenceof the remuneration committee, thecommitteeshouldat leastaddress thechair man of thecollegialbodyand/or chiefexecutiveofficerof thecompanyfor theiropinion on theremuneration ofotherexecutivedirectorsor members of the managementbodies.
n o t a p p l i C a B l e n o t fo r m e d ( e x p l a n a t i o n i n C l a u s e 4 . 7 . ) . 3 5
4.13.4.theremuneration committeeshouldreporton theexerciseof itsfunctions totheshareholdersandbepresentat theannualgeneral meetingfor thispurpose.
4.14.1. Keyfunctionsof theaudit committeeshouldbethefollowing: • observetheintegrityof the financial information providedbythecompany, in particularby reviewingthe relevance andconsistencyof the accounting
methodsusedby the company anditsgroup(includingthe criteria for the consolidation of theaccountsof companies in thegroup); • at least once a year review the systems of internal control andrisk man-
agement toensure that the key risks (inclusiveof the risks in relation with compliancewith existinglawsandregulations)areproperlyidentified,managedandreflectedin theinformation provided;
•ensuretheefficiencyof theinternalaudit function,amongother things,by makingrecommendationson theselection,appointment,reappointmentand removalofthe headoftheinternalauditdepartmentandon thebudgetofthe department,andbymonitoringtheresponsivenessof themanagement toits findingsandrecommendations.shouldtherebe nointernalauditauthorityin thecompany, the needforoneshouldbereviewedat leastannually;
• Make recommendations to the collegialbody related with selection, appointment, reappointmentandremovalof theexternalauditor (tobedone bythegeneralshareholders'meeting)andwith thetermsandconditionsof hisengagement.thecommitteeshouldinvestigatesituationsthat leadtoa resignation of theauditcompanyorauditorandmakerecommendationson requiredactions in such situations;
•Monitor independenceandimpartialityof theexternalauditor, in particularbyreviewingtheaudit company's compliance with applicableguidance relatingtotherotation ofauditpartners, thelevelof feespaidbythecompany,andsimilar issues. in order topreventoccurrenceof material conflicts of interest, the committee,basedon the auditor'sdisclosedinter aliadata on allremunerationspaidbythecompanytotheauditorand network,should atall timesmonitor natureandextentof the non-audit services. Havingregardtotheprincipalsandguidelinesestablishedin the16 May2002Commission Recommendation 2002/590/eC, the committee shoulddetermine andapplyaformalpolicyestablishingtypesof non-auditservicesthatare(a) excluded, (b)permissible only after review by the committee, and(c)permissible without referral tothecommittee;
• Reviewefficiencyoftheexternalauditprocessandresponsivenessofmanagementtorecommendationsmadein theexternalauditor'smanagementletter.
4.14.2. all members of the committee shouldbe furnished with complete information on particularsof accounting, financial andotheroperationsof thecompany.Company's management shouldinform theaudit committee of the methods used to account for significant and unusual transactions where the accounting treatment may be open to different approaches. in such caseaspecialconsideration shouldbegiven tocompany'soperationsin offshorecentersand/oractivities carriedout through specialpurposevehicles (organizations)andjustification of such operations.
4.14.3. the audit committee should decide whether participation of the chairman of thecollegialbody, chiefexecutiveofficerof thecompany, chief financialofficer(orsuperioremployeesin chargeof finances,treasuryandaccounting),or internalandexternalauditors in themeetingsof thecommitteeis required(if required, when).thecommitteeshouldbeentitled, when needed, to meet with any relevantperson without executivedirectors and membersof the managementbodiespresent.
4.14.4. internal andexternal auditors shouldbe secured with not only effective workingrelationship withmanagement,butalso with freeaccess to the collegialbody. For thispurpose the audit committee shouldact as the principal contactperson for theinternalandexternalauditors.
4.14.5.the audit committee should be informed of the internal auditor's workprogram,andshouldbefurnished with internalaudit's reportsorperiodicsummaries.theauditcommitteeshouldalsobeinformedof thework program of the external auditor and should be furnished with report disclosingall relationshipsbetween theindependentauditorandthecompany anditsgroup.thecommitteeshouldbetimelyfurnishedinformation on all issuesarisingfrom theaudit.
4.14.6.the audit committee shouldexamine whether the company is followingapplicableprovisionsregardingthepossibilityforemployeestoreport alleged significant irregularities in the company, by way of complaints or through anonymous submissions (normally toan independent memberof thecollegialbody),andshouldensurethat thereisaprocedureestablished forproportionateandindependent investigation of theseissuesandforappropriatefollow-upaction.
| 4.14.7.the audit committee shouldreport on its activities to the collegial bodyat leastoncein everysixmonths,at thetimetheyearlyand half-yearly statementsareapproved. |
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|---|---|---|
| 4.15.everyyear thecollegialbodyshouldconduct theassessmentof itsac tivities.theassessment shouldincludeevaluation of collegialbody's struc ture,workorganization andabilitytoactasagroup,evaluation ofeach ofthe collegialbody member's andcommittee's competence and work efficiency andassessment whether thecollegialbody hasachieveditsobjectives.the collegialbodyshould,at leastonceayear,makepublic(aspartof theinfor mation thecompanyannuallydiscloseson its management structuresand practices) respective information on its internal organization and working procedures,andspecifywhatmaterialchangesweremadeasaresultof the assessmentof thecollegialbodyof itsown activities. |
no | thepracticeof committees isbeingformed. |
| Principle V:The working procedure of the company'scollegial bodies sion-making and encourage active co-operation between the company's bodies. |
The working procedure of supervisory andmanagement bodies established in the companyshould ensure efficient operation of these bodies and deci | |
| 5.1.thecompany'ssupervisoryandmanagementbodies(hereinafter in this principletheconcept'collegialbodies'coversboth thecollegialbodiesofsu pervision and the collegial bodies of management) should be chaired by chairpersonsof thesebodies.thechairperson ofacollegialbody is respon sibleforproperconvocation of thecollegialbodymeetings.thechairperson shouldensurethat information about the meetingbeingconvenedandits agendaarecommunicatedtoallmembersof thebody.thechairperson ofa collegialbodyshouldensureappropriateconductingof themeetingsof the collegialbody.thechairperson shouldensureorderandworkingatmosphere duringthe meeting. |
Yes | the chairman of board ensures proper convocation and organization the boardmeetings.the noticeon thegeneralmeetingtobeconvenedis send ing to membersof boardaccordingtotheregulationsof theboard. |
| 5.2. it is recommended that meetings of the company's collegial bodies shouldbecarriedoutaccordingtothescheduleapprovedin advanceatcer tain intervalsof time.each companyis freetodecide how often toconvene meetingsof thecollegialbodies,but it isrecommendedthat thesemeetings shouldbeconvenedatsuch intervals,whichwouldguaranteean interrupted resolution oftheessentialcorporategovernanceissues.Meetingsofthecom pany's supervisoryboardshouldbeconvenedat leastoncein aquarter,and thecompany'sboardshould meetat leastoncea month12 |
Yes | Board meetings are calledat appropriate intervals to ensure continuity of essentialcorporategovernanceissues. urgent issuesconvenedduringemer gency meetings. |
| 5.3. Membersofacollegialbodyshouldbe notifiedabout themeetingbeing convenedin advancein order toallow sufficient timeforproperpreparation fortheissueson theagendaofthemeetingandtoensurefruitfuldiscussion and adoption ofappropriatedecisions. alongsidewith the noticeabout themeet ingbeingconvened,allthedocumentsrelevanttotheissueson theagendaof the meetingshouldbesubmittedtothe membersof thecollegialbody.the agendaof the meetingshould notbechangedor supplementedduringthe meeting,unlessallmembersofthecollegialbodyarepresentorcertain issues ofgreat importancetothecompanyrequireimmediateresolution. |
Yes | agendaandall materials requiredaccordingtotheagendashallbesent to the Members of the Board by electronic mail in advance ; normally the agendais not changedduring meetingsunless it is necessitytosolveaddi tionalquestions. |
| 5.4. in ordertoco-ordinateoperation ofthecompany'scollegialbodiesanden sureeffectivedecision-makingprocess, chairpersonsof thecompany's colle gial bodies of supervision and management should closely co-operate by co-coordinatingdatesofthemeetings,theiragendasandresolvingotherissues ofcorporategovernance.Membersofthecompany'sboardshouldbefreetoat tend meetingsof the company's supervisoryboard, especially where issues concerningremovalof theboardmembers, their liabilityor remuneration are discussed. |
not appliCaBle | not relevant,as thesupervisory Boardis not formed. |
| Principle VI:The equitable treatment ofshareholders and shareholder rights porate governance framework should protect the rights of the shareholders. |
The corporate governance framework should ensure the equitable treatment of allshareholders, includingminority and foreign shareholders.The cor | |
| 6.1. it isrecommendedthat thecompany'scapitalshouldconsistonlyof the shares thatgrant thesamerights tovoting,ownership,dividendandother rights toall their holders. |
Yes | the capital of the Company is madeupof shares conferringto the holders thereofequalvotingandownershiprights,andtherighttoreceivedividends. |
| 6.2. it isrecommendedthat investorsshould haveaccesstotheinformation concerningtherightsattachedtothesharesof the newissueor thoseissued earlier in advance, i.e.beforetheypurchaseshares. |
Yes | theCompanyprovidesitsinvestorsinformation abouttherightsconferredby the newlyissuedsharesby makingapublicannouncement tothiseffect. |
11 thefrequencyofmeetingsof thecollegialbodyprovidedfor in therecommendationmustbeappliedin thosecaseswhen both additionalcollegialbodiesareformedat thecompany, theboard andthesupervisoryboard. in theeventonlyoneadditional collegialbodyis formedin thecompany, thefrequencyof its meetings maybeasestablishedfor thesupervisoryboard, i.e.at least oncein aquarter.
37
| 6.3. Transactions that are important to the company and its shareholders, such as transfer, investment, and pledge of the company's assets or any other type of encumbrance should be subject to approval of the general share- holders' meeting. All shareholders should be furnished with equal oppor- tunity to familiarize with and participate in the decision-making process when significant corporate issues, including approval of transactions referred to above, are discussed. |
YES | The Shareholders of the Company approving transactions which approving is providing according the Lithuanian Companie's Law and the articles of As- sociation. The Board of the Company passes other important decisions. |
|---|---|---|
| 6.4. Procedures of convening and conducting a general shareholders' meet- ing should ensure equal opportunities for the shareholders to effectively par- ticipate at the meetings and should not prejudice the rights and interests of the shareholders. The venue, date, and time of the shareholders' meeting should not hinder wide attendance of the shareholders. |
YES | Information about shareholders' meetings is published in the same way as it is required by the Law. Shareholders' meetings convened at the Company's residence. |
| 6.5. If is possible, in order to ensure shareholders living abroad the right to access to the information, it is recommended that documents on the course of the general shareholders' meeting should be placed on the publicly ac- cessible website of the company not only in Lithuanian language, but in Eng- lish and /or other foreign languages in advance. It is recommended that the minutes of the general shareholders' meeting after signing them and/or adopted resolutions should be also placed on the publicly accessible web- site of the company. Seeking to ensure the right of foreigners to familiarize with the information, whenever feasible, documents referred to in this rec- ommendation should be published in Lithuanian, English and/or other for- eign languages. Documents referred to in this recommendation may be published on the publicly accessible website of the company to the extent that publishing of these documents is not detrimental to the company or the company's commercial secrets are not revealed. |
YES | All information about the Board meeting, the proposed drafts of decisions, the taken decisions is hosted in the Company's website on the Lithuanian and English languages. |
| 6.6. Shareholders should be furnished with the opportunity to vote in the general shareholders' meeting in person and in absentia. Shareholders should not be prevented from voting in writing in advance by completing the gen- eral voting ballot. |
YES | The shareholders of the Company may exercise their rights individually in person, via their proxies also by voting in writing in advance. The Company confers to its shareholders the rights provided for by the Law on Companies. |
| 6.7. With a view to increasing the shareholders' opportunities to participate effectively at shareholders' meetings, the companies are recommended to expand use of modern technologies by allowing the shareholders to partic- ipate and vote in general meetings via electronic means of communication. In such cases security of transmitted information and a possibility to identify the identity of the participating and voting person should be guaranteed. Moreover, companies could furnish its shareholders, especially shareholders living abroad, with the opportunity to watch shareholder meetings by means of modern technologies. |
N 0 | The Company does not have the technical potential. |
| Principle VII: The avoidance of conflicts of interest and their disclosure The corporate governance framework should encourage members of the corporate bodies to avoid conflicts of interest and assure transparent and effective mechanism of disclosure of conflicts of interest regarding members of the corporate bodies. |
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| 7.1. Any member of the company's supervisory and management body should avoid a situation, in which his/her personal interests are in conflict or may be in conflict with the company's interests. In case such a situation did occur, a member of the company's supervisory and management body should, within reasonable time, inform other members of the same colle- gial body or the company's body that has elected him/her, or to the com- pany's shareholders about a situation of a conflict of interest, indicate the nature of the conflict and value, where possible. |
YES | Members of the Company's management body are trying to follow the rec- ommendations listed at this article, but there are no any regulations about such reports and information in the Company. |
| 7.2. Any member of the company's supervisory and management body may not mix the company's assets, the use of which has not been mutually agreed upon, with his/her personal assets or use them or the information which he/she learns by virtue of his/her position as a member of a corporate body for his/her personal benefit or for the benefit of any third person without a prior agreement of the general shareholders' meeting or any other corpo- rate body authorized by the meeting. |
YES | Members of the Company's management body are trying to follow the rec- ommendations listed at this article, but there are no any regulations about such reports and information in the Company. |
| 7.3. Any member of the company's supervisory and management body may conclude a transaction with the company, a member of a corporate body of which he/she is. Such a transaction (except insignificant ones due to their low value or concluded when carrying out routine operations in the com- pany under usual conditions) must be immediately reported in writing or orally, by recording this in the minutes of the meeting, to other members of the same corporate body or to the corporate body that has elected him/her or to the company's shareholders. Transactions specified in this recommen- dation are also subject to recommendation 4.5 |
YES | Members of the Company's management body are trying to follow the rec- ommendations listed at this article, but there are no any regulations about such reports and information in the Company. |
12 thelawon Companiesof the Republicoflithuania(official Gazette,2003, no123-5574) nolongerassignsresolutionsconcerningtheinvestment, transfer, lease,mortgageoracquisition of thelong-termsassetsaccounting formorethan 1/20of thecompany'sauthorisedcapital tothecompetenceof thegeneral shareholders'meeting. However, transactions thatareimportantandmaterial for thecompany'sactivityshouldbeconsideredand approvedbythegeneral shareholders'meeting.thelaw on Companiescontains noprohibition tothiseffecteither.Yet, in order not toencumber thecompany'sactivityandescapean unreasonablyfrequentconsideration of transactionsat the meetings, companiesarefreetoestablish theirown criteriaof material transactions, which aresubject totheapprovalof the meeting.Whileestablishingthesecriteriaof material transactions, companiesmayfollow thecriteriasetout in items3,4,5and6ofparagraph 4of article34of thelaw on Companiesorderogatefromthemin view of thespecific natureof theiroperation andtheirattempt toensureuninterrupted,efficient functioningof thecompany.
13 thedocuments referredtoaboveshouldbeplacedon thecompany's websitein advance with dueregardtoa10-dayperiodbeforethegeneral shareholders'meeting,determinedin paragraph 7of article26of thelaw on Companiesof the Republicoflithuania(official Gazette,2003, no123-5574).
7.4. any member of the company's supervisory and management body shouldabstain fromvotingwhen decisionsconcerningtransactionsorother issuesofpersonalorbusiness interestarevotedon.
Members of the Company's management are trying to follow the recommendations listedat thisarticle.
8.1. a companyshouldmakeapublicstatementof thecompany'sremuneration policy(hereinafter theremuneration statement)which shouldbeclear and easily understandable.this remuneration statement should be publishedasapartof thecompany'sannual statementas wellaspostedon the company's website. 8.2. Remuneration statementshouldmainlyfocuson directors'remuneration policy for thefollowingyearand, ifappropriate, thesubsequent years.the statement shouldcontain a summary of the implementation of the remuneration policy in the previous financial year. special attention should be given toanysignificant changes in company's remuneration policyas comparedtotheprevious financialyear. 8.3.Remunerationstatementshouldleastwiseincludethefollowinginformation: • explanation of the relative importance of the variable and non-variable componentsofdirectors'remuneration; • sufficient information on performance criteria that entitles directors to shareoptions, sharesorvariablecomponentsof remuneration; • an explanation how thechoiceofperformancecriteriacontributes tothe long-term interestsof thecompany; • an explanation of themethods,appliedin order todeterminewhetherperformancecriteria havebeen fulfilled; •sufficient information on defermentperiods with regardtovariablecomponentsof remuneration; •sufficient information on thelinkagebetween theremuneration andperformance; •the main parametersandrationaleforanyannualbonus schemeandany other non-cash benefits; •sufficient information on thepolicyregardingtermination payments; • sufficient information with regardto vestingperiods for share-basedremuneration,as referredtoin point8.13of thisCode; •sufficientinformation on thepolicyregardingretention ofsharesaftervesting,as referredtoin point8.15of thisCode; •sufficient information on thecomposition ofpeergroupsofcompaniesthe remuneration policy of which hasbeen examinedin relation to the establishmentof theremuneration policyof thecompanyconcerned; • a description of themain characteristicsofsupplementarypension orearly retirement schemes fordirectors; •Remunerationstatementshouldnotincludecommerciallysensitiveinformation. 8.4. Remuneration statementshouldalsosummarizeandexplain company's policy regardingthe terms of the contracts executed with executivedirectorsand membersof the managementbodies. it shouldinclude, interalia, information on theduration ofcontractswith executivedirectorsandmembers of the managementbodies, the applicable noticeperiods anddetails of provisions for termination payments linked to early termination under contracts forexecutivedirectorsand membersof the managementbodies. 8.5.Remunerationstatementshouldalsocontaindetailedinformationontheentireamountof remuneration, inclusiveofotherbenefits, that waspaidtoindividualdirectorsovertherelevantfinancialyear.thisdocumentshouldlistatleast theinformation setoutin items8.5.1to8.5.4foreach personwho hasservedas adirectorofthecompanyatanytimeduringtherelevant financialyear. 8.5.1.the followingremuneration and/or emoluments-relatedinformation the earnings of the company's employees is the confidential information. thereis nopracticetopreparereportabout thecompany'searningspolicy. Questionsabout theCodeof Recommendedearningsandbenefitspolicyis plannedtodiscussin thefutureduetotheexchangesofconditions. Brief information about thebenefitsfor theCompanymanagementbodiesisavailablein thelegislation. thereasonsareshown in Clause8.1. thereasonsareshown in Clause8.1. thereasonsareshown in Clause8.1.thisinformationwillbepossibletopublish, exceptpart of the information consideredto constitute a commercial secretof theCompany. thereasonsareshown in Clause8.1.thisinformationwillbepossibletopublish, exceptpart of the information consideredto constitute a commercial secretof theCompany. Principle VIII:Company'sremuneration policy Remuneration policy and procedure for approval, revision and disclosure of directors'remuneration established in the companyshould prevent potentialconflicts of interest and abuse in determining remuneration of directors, in addition itshould ensure publicity and transparency both ofcompany's remuneration policy and remuneration of directors. no no no no no
Yes
C
•thetotalamountofremuneration paidorduetothedirectorforservicesper-
shouldbedisclosed:
| formedduringtherelevant financialyear, inclusiveof, whererelevant,atten dancefees fixedbytheannualgeneralshareholdersmeeting; |
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|---|---|---|---|
| •theremuneration andadvantagesreceivedfromanyundertakingbelonging tothesamegroup; |
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| •theremuneration paidin theformofprofit sharingand/orbonuspayments andthereasonswhysuch bonuspaymentsand/orprofitsharingweregranted; |
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| • ifpermissiblebythelaw,anysignificantadditional remuneration paidtodi rectorsforspecialservicesoutsidethescopeoftheusual functionsofadirector; |
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| •Compensation receivableorpaidtoeach formerexecutivedirectorormem berofthemanagementbodyasaresultof hisresignation fromtheofficedur ingtheprevious financialyear; |
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| •totalestimatedvalueof non-cash benefitsconsideredasremuneration,other than theitemscoveredin theabovepoints. |
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| 8.5.2. asregardssharesand/or rightstoacquireshareoptionsand/orallother share-incentiveschemes, thefollowinginformation shouldbedisclosed: |
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| •the numberof shareoptionsofferedor sharesgrantedbythecompanydur ingtherelevant financialyearandtheirconditionsofapplication; |
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| •the numberofsharesoptionsexercisedduringtherelevant financialyearand, foreachofthem,thenumberofsharesinvolvedandtheexercisepriceorthevalue oftheinterestin theshareincentiveschemeattheendofthe financialyear; |
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| •thenumberofshareoptionsunexercisedattheendofthefinancialyear;theirex erciseprice,theexercisedateandthemainconditionsfortheexerciseoftherights; |
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| • all changes in thetermsandconditionsofexistingshareoptionsoccurring duringthe financialyear. |
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| 8.5.3. the following supplementary pension schemes-related information shouldbedisclosed: |
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| •When thepension schemeisadefined-benefitscheme,changesin thedirec tors'accruedbenefitsunder thatschemeduringtherelevant financialyear; |
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| •When thepension schemeisdefined-contribution scheme,detailedinfor mation on contributionspaidorpayablebythecompanyin respectof thatdi rectorduringtherelevant financialyear. |
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| 8.5.4.thestatementshouldalsostateamountsthat thecompanyoranysub sidiarycompanyorentityincludedin theconsolidatedannual financial report of thecompany haspaidtoeach person who has servedasadirector in the companyatany timeduringtherelevant financial year in theform of loans, advancepaymentsorguarantees, includingtheamountoutstandingandthe interest rate. |
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| 8.6.Wheretheremuneration policyincludesvariablecomponentsof remu neration, companies should set limits on the variable component(s).the non-variablecomponentof remuneration shouldbesufficient toallow the companytowithholdvariablecomponentsof remunerationwhen perform ancecriteriaare not met. |
no | thereasonsareshown in Clause8.1. | |
| 8.7. awardofvariablecomponentsof remuneration shouldbesubject topre determinedand measurableperformancecriteria. |
no | thereasonsareshown in Clause8.1. | |
| 8.8.Whereavariablecomponentof remuneration isawarded,a majorpart of thevariablecomponentshouldbedeferredforaminimumperiodof time. thepartof the variable component subject todeferment shouldbedeter minedin relation totherelativeweightof thevariablecomponentcompared tothe non-variablecomponentof remuneration. |
no | thereasonsareshown in Clause8.1. | |
| 8.9.Contractualarrangementswith executiveormanagingdirectorsshould includeprovisionsthatpermit thecompanytoreclaimvariablecomponents of remuneration thatwereawardedon thebasisofdatawhich subsequently provedtobe manifestly misstated. |
no | thereasonsareshown in Clause8.1. | |
| 8.10.termination paymentsshould notexceeda fixedamountor fixed num berofyearsofannual remuneration,which should, in general, notbe higher than twoyearsof the non-variablecomponentof remuneration or theequiv alent thereof. |
no | thereasonsareshown in Clause8.1. |
| 8.11.termination payments should notbepaidif thetermination isdueto inadequateperformance. |
no | thereasonsareshown in Clause8.1. |
|---|---|---|
| 8.12.theinformation on preparatoryanddecision-makingprocesses,during which apolicyofremuneration ofdirectorsisbeingestablished,shouldalsobe disclosed. information shouldincludedata, ifapplicable,on authoritiesand composition oftheremuneration committee, namesandsurnamesofexternal consultants whoseservices havebeen usedin determination of theremuner ation policyaswellastheroleofshareholders'annualgeneralmeeting. |
no | thereasonsareshown in Clause8.1. |
| 8.13.sharesshould notvest forat least threeyearsafter theiraward. | no | thereasonsareshown in Clause8.1. |
| 8.14.shareoptionsoranyother right toacquiresharesor toberemunerated on thebasisof shareprice movements should notbeexercisableforat least threeyearsafter theiraward. Vestingof sharesandtheright toexerciseshare optionsoranyother right toacquiresharesor toberemuneratedon thebasis of sharepricemovements, shouldbesubject topredeterminedandmeasura bleperformancecriteria. |
no | thereasonsareshown in Clause8.1. |
| 8.15. aftervesting,directorsshouldretain a numberofshares,untiltheendof theirmandate,subjecttothe needto financeanycostsrelatedtoacquisition of theshares.the numberof shares toberetainedshouldbe fixed, forexample, twicethevalueof totalannual remuneration (the non-variableplus thevari ablecomponents). |
no | thereasonsareshown in Clause8.1. |
| 8.16. Remuneration of non-executiveor supervisorydirectors should not in cludeshareoptions. |
no | thereasonsareshown in Clause8.1. |
| 8.17.shareholders, in particular institutionalshareholders,shouldbeencour agedtoattendgeneralmeetingswhereappropriateandmakeconsidereduse of theirvotesregardingdirectors'remuneration. |
no | thereasonsareshown in Clause8.1. |
| 8.18.Withoutprejudicetotheroleandorganization of therelevantbodiesre sponsibleforsettingdirectors'remunerations, theremuneration policyorany other significant changein remuneration policy shouldbeincludedintothe agendaoftheshareholders'annualgeneralmeeting. Remuneration statement shouldbeputforvotingin shareholders'annualgeneralmeeting.thevotemay beeithermandatoryoradvisory. |
no | thereasonsareshown in Clause8.1. |
| 8.19.schemesanticipatingremuneration ofdirectors in shares, shareoptions oranyother right topurchasesharesorberemuneratedon thebasisof share price movements shouldbesubject tothepriorapprovalof shareholders'an nualgeneral meetingby wayofaresolution prior totheiradoption.theap provalofschemeshouldberelatedwith theschemeitselfand nottothegrant ofsuch share-basedbenefitsunderthatschemetoindividualdirectors. allsig nificant changes in schemeprovisions shouldalsobesubject toshareholders' approvalpriortotheiradoption;theapprovaldecision shouldbemadein share holders'annualgeneralmeeting. in such caseshareholdersshouldbe notified on alltermsofsuggestedchangesandgetan explanation on theimpactofthe suggestedchanges. |
no | the Companydoes notpractice the remuneration bydirector stocksorop tions. |
| 8.20.thefollowingissuesshouldbesubjecttoapprovalbytheshareholders'an nualgeneralmeeting: |
no | nosuch practiceisbeingenforcedin theCompany |
| • Grantofshare-basedschemes, includingshareoptions, todirectors; • determination ofmaximumnumberof sharesandmain conditionsof share granting; •thetermwithinwhich optionscan beexercised; |
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| •theconditions forany subsequent changein theexerciseof theoptions, if permissiblebylaw; |
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| • allother long-term incentive schemes for which directorsare eligibleand which are notavailabletootheremployeesofthecompanyundersimilarterms. annualgeneralmeetingshouldalsosetthedeadlinewithinwhich thebodyre sponsibleforremuneration ofdirectorsmayawardcompensationslistedin this articletoindividualdirectors. |
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| 8.21.should national law or company's articlesof association allow,anydis countedoption arrangementunder which anyrightsaregrantedtosubscribe tosharesatapricelower than themarketvalueof theshareprevailingon the dayofthepricedetermination,ortheaverageofthemarketvaluesovera num berofdaysprecedingthedate when theexercisepriceisdetermined, should |
no | nosuch practiceisbeingenforcedin theCompany |
alsobesubject totheshareholders'approval.
41
| 8.22.provisionsof articles8.19and8.20should notbeapplicabletoschemes allowingforparticipation undersimilarconditionstocompany'semployeesor employeesofanysubsidiarycompanywhoseemployeesareeligibletopartic ipatein theschemeandwhich hasbeen approvedin theshareholders'annual generalmeeting. |
no | nosuch practiceisbeingenforcedin theCompany |
|---|---|---|
| 8.23.prior totheannualgeneralmeetingthat is intendedtoconsiderdecision stipulatedin article8.19,theshareholdersmustbeprovidedan opportunityto familiarize with draft resolution andproject-related notice (thedocuments shouldbepostedon thecompany'swebsite).the noticeshouldcontain thefull textoftheshare-basedremunerationschemesoradescriptionoftheirkeyterms, aswellasfull namesoftheparticipantsin theschemes.noticeshouldalsospec ifytherelationshipof theschemesandtheoverall remuneration policyof the directors. draft resolutionmust haveaclear referencetotheschemeitselfor to thesummaryof itskeyterms.shareholdersmustalsobepresentedwith infor mation on howthecompanyintendstoprovideforthesharesrequiredtomeet itsobligationsunderincentiveschemes. itshouldbeclearlystatedwhetherthe companyintendstobuysharesin themarket, holdthesharesin reserveorissue new ones.thereshouldalsobeasummaryon scheme-relatedexpenses the companywillsufferduetotheanticipatedapplication of thescheme. all infor mation given in thisarticlemustbepostedon thecompany'swebsite. |
no | nosuch practiceisbeingenforcedin theCompany |
| Principle IX:The role ofstakeholdersin corporate governance |
The corporate governance framework should recognize the rights of stakeholders as established by law and encourage active co-operation between companies and stakeholdersin creating the companyvalue, jobs and financialsustainability.Forthe purposes ofthis Principle,the concept"stakeholders"includesinvestors, employees,creditors,suppliers,clients, localcommunity and other persons having certain interest in the companyconcerned.
| 9.1.the corporategovernance framework shouldassure that the rights of stakeholders thatareprotectedbylaw arerespected. |
Yes | themanagementbodiesof theCompanyseektoensuretherightsofall in terest holdersand, toan extentpossible, takes theiropinion intoaccount. |
|---|---|---|
| 9.2.the corporategovernance framework shouldcreate conditions for the stakeholderstoparticipatein corporategovernancein themannerprescribed by law. examples of mechanisms of stakeholderparticipation in corporate governanceinclude:employeeparticipation in adoption ofcertain keydeci sions for thecompany; consultingtheemployeeson corporategovernance andother important issues;employeeparticipation in thecompany's share capital;creditor involvement in governancein thecontextof thecompany's insolvency,etc. |
Yes | interest holdersareauthorisedtoparticipatein themanagementoftheCom panyandin theprocessof takingthedecisions relevant totheas this ispro videdaccordingthelaw oflithuanian Republicand when theparticipation of employees helps to makeimportantCompany'sdecisions |
| 9.3. Where stakeholders participate in the corporate governance process, theyshould haveaccess torelevant information. |
Yes | theserequirementsarecomplied with totheextent requiredbythelawsof the Republicoflithuania. |
| Principle X: Information disclosure and transparency The corporate governance framework should ensure thattimely and accurate disclosure ismade on allmaterial information regarding the company, in |
||
| cluding the financialsituation, performance and governance of the company. | ||
| 10.1.thecompanyshoulddiscloseinformation on: •the financialandoperatingresultsof thecompany; •Companyobjectives; |
Yes | theCompanydisclosestherelevant information, in theestablishedmanner, tolietuvosbankas,Vilnius nasdaQ oMXVilniusstockexchangeandthedaily |
| •persons holdingbytherightofownershipor in controlofablockof shares in thecompany; |
"Kaunodiena". | |
| •Membersof thecompany'ssupervisoryandmanagementbodies,chiefex ecutiveofficerof thecompanyandtheir remuneration; |
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| • Material foreseeableriskfactors; •transactionsbetween thecompanyandconnectedpersons,aswellastrans |
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| actions concludedoutsidethecourseof thecompany's regularoperations; • Material issues regardingemployeesandother stakeholders; • Governancestructuresandstrategy. thislistshouldbedeemedasaminimumrecommendation,whilethecom |
Yes
10.2. it is recommendedtothecompany, which is theparentofother companies, that consolidatedresultsof the wholegroupto which thecompany belongs shouldbedisclosed when information specifiedin item 1 of Rec-
tion specifiedin this list.
ommendation 10.1isunderdisclosure.
thecompanykeeps thisprinciple.
| 10.3. it is recommendedthat information on theprofessionalbackground, qualificationsof themembersofsupervisoryandmanagementbodies,chief executiveofficerofthecompanyshouldbedisclosedaswellaspotentialcon flicts of interest that may have an effect on theirdecisions when informa tion specifiedin item4of Recommendation 10.1about themembersof the company'ssupervisoryandmanagementbodiesisunderdisclosure. it isalso recommendedthat information about theamountof remuneration received from the company and other income should be disclosed with regard to membersof thecompany's supervisoryand managementbodiesandchief executiveofficerasperprinciple Viii. |
no | it isavailablethat company's information that is not confidential. | ||
|---|---|---|---|---|
| 10.4. it isrecommendedthat information about thelinksbetween thecom pany and its stakeholders, including employees, creditors, suppliers, local community,aswellasthecompany'spolicywith regardto human resources, employeeparticipation schemes in thecompany's sharecapital,etc. should bedisclosedwhen information specifiedin item7of Recommendation 10.1 isunderdisclosure. |
no | thecompanydoes notapplysuch practise. | ||
| 10.5. information shouldbedisclosedin such a waythat neither sharehold ers nor investorsarediscriminatedwith regardtothemannerorscopeofac cesstoinformation. information shouldbedisclosedtoallsimultaneously. it is recommendedthat notices about material events shouldbe announced before or after a tradingsession on the Vilnius stock exchange, so that all the company's shareholders andinvestors should have equal access to the information and makeinformedinvestingdecisions. |
Yes | theCompanyensurestheaccuracyandexpedition of thegiven information. | ||
| 10.6.Channels fordisseminatinginformation shouldprovidefor fair, timely andcost-efficientor in casesprovidedbythelegalactsfreeofchargeaccess torelevant information byusers. it is recommendedthat information tech nologiesshouldbeemployedforwiderdissemination of information, for in stance, by placing the information on the company's website. it is recommendedthat information shouldbepublishedandplacedon thecom pany's website not only in lithuanian, but also in english, and, whenever possibleand necessary, in other languagesas well. |
Yes | theCompanyensures compliance with theserequirement, theinformation isannouncedin lithuanian andenglish. |
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| 10.7. it is recommendedthat thecompany'sannual reportsandotherperi odicalaccountspreparedbythecompanyshouldbeplacedon thecompany's website. it isrecommendedthat thecompanyshouldannounceinformation about materialeventsandchanges in thepriceof thecompany's shareson thestockexchangeon thecompany's websitetoo. |
Yes | theCompanyensures compliance with theserequirement. | ||
| Principle XI:The selection of the company's auditor Themechanismof the selection of the company's auditorshould ensure independence of the firmof auditor'sconclusion and opinion. |
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| 11.1. an annualauditof thecompany's financial reportsandinterimreports shouldbeconductedbyan independent firmofauditors in order toprovide an externalandobjectiveopinion on thecompany's financial statements |
Yes | therecommendation isbeingfollowedpartly,becausean independent firm ofauditors is not superviseinterim reportsof theCompany. |
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| 11.2. it isrecommendedthat thecompany'ssupervisoryboardand,whereit is not setup, thecompany'sboardshouldproposeacandidate firm ofaudi tors tothegeneral shareholders'meeting. |
Yes | theaudit isproposedtothegeneral meetingof shareholdersby the Board of theCompany. |
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| 11.3. it is recommendedthat thecompanyshoulddisclosetoits sharehold ers the levelof feespaidtothe firm of auditors for non-audit services ren dered to the company. this information should be also known to the company's supervisory board and, where it is not formed, the company's boardupon theirconsiderationwhich firmofauditorstoproposeforthegen eral shareholders'meeting. |
Yes | the information is usuallydisclosedto shareholders, it is available for the Company'sboard. |
sincerely,
Managing director, GediminasČeika
43
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