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2012


Dear shareholder of Arco Vara AS,

An extraordinary general meeting of the shareholders of Arco Vara AS (registry code 10261718; seat at Jõe 2B, Tallinn) will be held at 9 am on 10 February 2012 in Tallinn, at Paadi 5, Clarion Hotel Euroopa (Ida-Euroopa A hall).

Baltplast OÜ, a shareholder of Arco Vara AS holding 18.9% of the share capital of Arco Vara AS, requests that an extraordinary general meeting of the shareholders of Arco Vara AS be called with the following agenda and has submitted the following draft resolutions:

Removal of the supervisory board members of Arco Vara AS, Mr Ragnar Meitern, Mr Aare Tark and Mr Kalev Tanner, and election of new members of the supervisory board.

  1. To remove Mr Ragnar Meitern, Mr Aare Tark and Mr Kalev Tanner from the supervisory board of Arco Vara AS.
  2. To elect Mr Toomas Tool, Mr Aivar Pilv and Mr Stefan David Balkin as members of the supervisory board of Arco Vara AS.

On 18 January 2012, the supervisory board of Arco Vara AS has resolved to approve the following agenda for the extraordinary general meeting of the shareholders:

Removal of the supervisory board members of Arco Vara AS, Mr Ragnar Meitern, Mr Aare Tark and Mr Kalev Tanner, and election of new members of the supervisory board.

As for the reasons for its proposal to change the composition of the supervisory board, Baltplast OÜ first pointed out that there has been a rapid decline in the financial performance of Arco Vara AS since the end of 2007 and that the Arco Vara group should be managed in a more reasonable and effective manner; it also noted that Baltplast OÜ as the majority shareholder of Arco Vara AS has been unable to be directly involved in the management of Arco Vara AS so far.

Materials relating to the extraordinary general meeting of the shareholders of Arco Vara AS are available on the website of Arco Vara AS at http://www.arcorealestate.com/investorile or at the office of Arco Vara AS in Tallinn, at Jõe 2B, from 9 am to 5 pm on business days.

Questions concerning the items on the agenda can be asked by an email to This email address is being protected from spambots. You need JavaScript enabled to view it.. The questions and answers will be posted on the website of Arco Vara AS. A shareholder is entitled to receive information on the activities of Arco Vara AS from the management board at the general meeting pursuant to law. The shareholders whose shares represent at least one-twentieth of the share capital of Arco Vara AS may request that additional items be included on the agenda if they submit such a request at least 15 days before the date of the general meeting, i.e. on 26 January 2012 at the latest; they may also submit draft resolutions concerning each item on the agenda if they submit such resolutions at least three days before the date of the general meeting, i.e. on 7 February 2012 at the latest. All requests and proposals of the shareholders should be submitted by an email to This email address is being protected from spambots. You need JavaScript enabled to view it. and they will be made public pursuant to the procedure provided by law.

The list of the shareholders entitled vote at the meeting will be closed as at seven days before the general meeting, i.e. at 11.59 pm on 3 February 2012.

Registration for the extraordinary general meeting will start at 8.45 am on 10 February 2012. For registration, please bring an identification document with you; representatives of shareholders should also bring a written authorisation document or other documents proving their right of representation. A shareholder may inform Arco Vara AS of the appointment of a representative or of withdrawal of authorisation granted to a representative before the general meeting by sending a digitally signed notice to the email address This email address is being protected from spambots. You need JavaScript enabled to view it. on 7 February 2012 at the latest.

Yours sincerely,

The management board of Arco Vara AS


Decisions of extraordinary general meeting of shareholders of Arco Vara

Arco Vara Supervisory Council remains unchanged

The extraordinary general meeting of shareholders of Arco Vara AS was held on February 10, 2012 at Clariton Hotel Europa, Paadi 5, in Tallinn.

The extraordinary general meeting of the shareholders of Arco Vara AS started at 9.00 a.m. and ended at 9.45 a.m. and it was competent to pass decisions regarding the items on the agenda. The agenda of the extraordinary general meeting of the shareholders of Arco Vara AS was published in January 19, 2012 in the newspaper Eesti Päevaleht and in the information system of the Tallinn Stock Exchange and on the website of Arco Vara AS http://www.arcorealestate.com.

The following decisions were passed at the extraordinary general meeting of the shareholders of Arco Vara AS:

1. Not to recall the supervisory board members of Arco Vara AS, Mr Ragnar Meitern, Mr Aare Tark and Mr Kalev Tanner.

The extraordinary general meeting of the shareholders of Arco Vara AS was held according to law and statute of Arco Vara AS.

Lembit Tampere
CEO
Arco Vara AS
phone: +372 614 4630
This email address is being protected from spambots. You need JavaScript enabled to view it.
http://www.arcorealestate.com


OÜ Kerberon, a subsidiary of Arco Investeeringute AS (100% subsidiary of Arco Vara AS) concluded a contract with AS Astro Holding for selling the right of superficies.

 

The sales price was 3.4 million euros, which was settled by the buyer at the time of the transaction. As a result of the transaction, the group incurred a loss of 695 thousand euros, the group’s assets decreased by 2,925 thousand euros and its liabilities decreased by 2,230 thousand euros. The transaction reduces the group’s annual revenue by approximately 500 thousand euros.

 

The purpose of the sale was to improve the group’s liquidity and to reduce its liabilities.

 

Kadaka tee 131, which is situated in Tallinn, includes a business and warehouse complex called Kerberon. The total area of the property is 24,176 m². Leasable area extends to 14,013 m² consisting of buildings of 8,350 m² and outdoor premises of 5,663 m².

 

Established in 1992, Arco Vara is one of the leading real estate development companies in the Baltic countries. The company’s main activity is real estate development, which is supported by brokerage, valuation, construction and property management.
The company has offices in 17 cities in Estonia, Latvia, Ukraine and Bulgaria.

 

 

Egert Paulberg
Financial controller
Arco Vara AS
Tel: +372 614 4503
This email address is being protected from spambots. You need JavaScript enabled to view it.
http://www.arcorealestate.com


Group Chief Executive’s review

In 2011 the Group reached a turning point in its operating results when after three consecutive years of decreasing sales revenue began to increase. Compared with 2008 when revenue was 40 million euros, 2009 when it was 25 million euros and 2010 when it was 21 million euros, revenue of roughly 43 million euros is a significant improvement. Sales growth is mainly attributable to two factors: increasing activity in the Estonian construction market where the public sector is driving market growth and improvements in the outlook of the development sector of the entire region, which allowed completing an important block transaction in Bulgaria.

The Group’s loss for 2011 resulted mostly from the Construction division, which operates in an industry that continues to be adversely affected by unfavourable contracts secured in earlier years and the bankruptcies of construction companies. On the other hand, after a period of several years the Service division earned a profit, and the operating profit of the Development division improved slightly compared with 2010.

In 2011, 111 apartments and plots were sold in Arco Vara’s projects: 60 in Estonia, 20 in Latvia and 31 in Bulgaria. In the fourth quarter of 2011 we completed the sale of plots at Merivälja. Major ongoing development projects include the Tivoli apartment building in Tallinn, which is in the design stage, and the Manastirski apartment building in Sofia, which has reached the stage of interior works. Phase I of the Manastirski apartment building, which covers an area in excess of 700 square metres and is scheduled for completion in the first quarter of 2012, is currently our largest active development project. The progress of the construction work can be viewed live at http://www.arcoinvest.bg/livd/video/camera-one-bg . We continue to develop the Bišumuiža 1 apartment project and to sell plots in Riga. Construction and sale of apartments also continues in the Kodukolde community in Tallinn where the progress of site operations can be viewed in real time at http://www.kodukolde.ee/#webcam .

A significant transaction of the fourth quarter was the signature of a certificate of delivery and acceptance with Cleves EOOD for the delivery of 21 apartments and 13 parking spaces in the Madrid project in Bulgaria. The total price of the transaction that triggered strong growth in the Group’s Bulgarian sales was 4.3 million euros, of which 2.5 million euros was prepaid in March 2008 and 1.8 million euros was paid in November 2011. In addition, the Group sold the property at Laeva 2 in Tallinn and, after the reporting date, the right of superficies on the property at Kadaka tee 131 in Tallinn.

For the Service division, 2011 was better than several previous years. Revenue grew and the division ended the year with an operating profit of 0.1 million euros compared with an operating loss of 0.4 million euros for 2010. The number of brokerage transactions increased by 29% and the number of valuation reports issued grew by 39% compared with 2010. At the same time, the number of brokers increased by only 1% and the number of appraisers grew by 17%.

In 2011, the Group secured new construction contracts of 10.9 million euros. Our order backlog as at 31 December 2011 was 11.7 million euros compared with 16.8 million euros at the end of 2010.  The Construction division’s operating loss is attributable to the unfavourable terms of some construction contracts signed in 2010 and the bankruptcies of its business partners. Due to the joint and several liability of consortium partners, Arco Ehitus had to continue the performance of two contracts on its own.

The largest construction projects that generated a negative contribution in 2011 include:

  • Construction of the Aviation Academy building in Tartu, performed in a consortium with OÜ Kristiine Ehitus (bankrupt), which resulted in a loss of 500 thousand euros.
  • Reconstruction of the academic building of the University of Life Sciences in Tartu, performed in a consortium with OÜ Wolmreks Ehitus (bankrupt), which resulted in a loss of 600 thousand euros.
  • Construction of the water and wastewater networks of Tamsalu community, performed as a subcontractor for AS K&H (bankrupt), which resulted in a loss of 240 thousand euros due to unsettled invoices.
  • Construction of the Emajõe drinking water facilities for AS Emajõe Veevärk, performed as a subcontractor for AS K&H (bankrupt), which resulted in unearned revenue of 340 thousand euros.
  • Construction and renovation of the water and wastewater networks of Iru village, which resulted in a loss of approximately 660 thousand euros due to incorrect data provided by the customer.
  • Construction of the water and wastewater pipelines of the wastewater collection area of Kadrina community, which resulted in a loss of approximately 480 thousand euros, caused by a steep rise in labour, materials and service costs (15-35%) in the first half of 2011.

In the 12 months of 2011, the Group’s loans and borrowings decreased by 6.6 million euros while equity to assets ratio remained virtually the same at around 40%. The weighted average interest rate of loans and borrowings rose year over year due to higher margins charged by banks and a higher Euribor and the weighted average duration of loans and borrowings increased.

KEY PERFORMANCE INDICATORS

  • The Group’s 12-month revenue and other income totalled 46.2 million euros, a roughly two-fold improvement on the previous financial year.
  • Operating loss for 2011 was 1.5 million euros, a substantial increase on 2010 when operating loss was 0.1 million euros.
  • Net loss for 2011 was 3.6 million euros, a substantial increase on 2010 when net loss was 0.3 million euros.
  • Equity to assets ratio at the year-end was 39.7% (31 December 2010: 39.4%). In 2011, return on equity was negative (2010: negative) and also return on invested capital was negative (2010: 1.8%).
  • At the end of 2011, the Group’s order backlog stood at 11.7 million euros compared with 16.8 million euros at the end of 2010.
  • In 2011, the Group sold 111 apartments and plots (2010: 129 apartments and plots).

 

    12M 2011 12M 2010 Q4 2011 Q4 2010
In millions of euros          
Revenue and other income   46.2 22.8 14.9 8.3
Operating profit/loss   -1.5 -0.1 1.2 0.5
Of which net loss on changes in the value of investment properties and inventories   1.8 -0.3 1.8 -0.2
Profit/loss before tax   -3.6 -0.3 0.0 1.0
Of which net gain/loss on disposal of financial assets   0.3 0.1 0.0 0.2
Net profit/loss   -3.6 -0.3 0.0 1.0
           
EPS (in euros)   -0.76 -0.06 0.00 0.21
           
Total assets at period-end   59.8 70.6    
Invested capital at period-end   48.8 59.5    
Net loans at period-end   22.9 27.5    
Equity at period-end   23.7 27.8    
           
Average loan term (in years)   2.2 0.8    
Average interest rate of loans (per year)   7.4% 6.4%    
ROIC (rolling, 4 quarters)   neg 1.8%    
ROE (rolling, 4 quarters)   neg neg    
           
Number of staff at period-end   146 153    


REVENUE AND PROFIT

    12M 2011 12M 2010 Q4 2011 Q4 2010
In millions of euros          
Revenue          
Service   2.4 1.9 0.6 0.5
Development   23.0 11.0 6.0 3.8
Construction   18.1 8.7 5.3 2.6
Eliminations   -0.4 -0.5 -0.1 -0.1
Total revenue   43.1 21.1 11.8 6.8
           
Operating profit/loss          
Service   0.1 -0.4 0.0 -0.3
Development   2.3 1.5 2.1 1.2
Construction   -2.9 -0.5 -0.7 -0.6
Eliminations   0.3 0.5 0.1 0.4
Unallocated expenses   -1.3 -1.2 -0.3 -0.2
Total operating profit/loss   -1.5 -0.1 1.2 0.5
           
Interest income and expense   -1.4 -1.2 -0.2 -0.7
Other finance income and expenses   -0.7 1.0 -0.9 1.2
Net profit/loss   -3.6 -0.3 0.0 1.0

The Development division’s revenue for 2011 was significantly boosted by the sale of inventory of 8.3 million euros to joint venture Tivoli Arendus OÜ and a block apartment sale transaction of 4.3 million euros conducted in the fourth quarter in Bulgaria. The revenue of the Construction division grew year over year mainly on account of increasing construction activity while its operating loss is attributable to a rapid upsurge in construction prices that emerged in 2010 and business partner bankruptcies. Finance income and expenses were strongly influenced by interest expense, which grew because the Madrid project was completed and capitalisation of associated borrowing costs was discontinued.

CASH FLOWS

      12M 2011 12M 2010
In millions of euros        
Cash flows from operating activities     -0.7 1.8
Cash flows from investing activities     0.3 6.1
Cash flows from financing activities     -1.6 -7.8
Net cash flow     -2.0 0.1
         
Cash and cash equivalents at beginning of period     4.2 4.1
Cash and cash equivalents at end of period     2.2 4.2

In March 2011, Arco Investeeringute AS repaid ahead of schedule the remaining 5.27 million euros of the loan taken from SEB Pank for acquiring the land under the Tivoli project and 0.12 million euros of the loan taken for acquiring the land under the Laeva project. Repayment of the Tivoli loan is not reflected in the Group’s cash flows because the buyer of the 50% stake in Tivoli Arendus OÜ paid the cash directly to SEB. Nor do the cash flows reflect that in December, following the sale of the Laeva 2 property, the Group repaid to SEB Pank a loan of 1.12 million euros.

Interest payments accounted for 2.0 million euros of the net cash outflow from financing activities. Scheduled settlements of loan principal and those related to inventory sales totalled 6.3 million euros. During the reporting period, the credit limit was used for financing the construction of the two last phases in the Kodukolde project and the Alasniidu and Lille tee nursery schools to the extent of 4.4 million euros in aggregate. Use of the credit limit by AS Kolde is not reflected in cash flows because invoices received from Merko Ehitus are booked as a loan and there are no actual cash movements. 

The largest current liabilities to be settled in the next 12 months comprise:

  • estimated principal repayments to be made on the sale of reserved premises and payments under the settlement schedule of the loan taken for the Boulevard Residence Madrid project in Sofia of 2.4 million euros;
  • repayments of the loan taken for the Manastirski project of 1.3 million euros;
  • repayments of an investment loan taken for a cash flow project at Kadaka tee 131 of 2.2 million euros;
  • repayments of the construction loan taken by AS Kolde of 1.3 million euros;
  • repayments of the loan taken for the Bišumuiža  1 project of 0.8 million euros.

In 2011, the Group made regular repayments under the loans taken for the Kodukolde and the Merivälja 2 projects in Tallinn, the Bišumuiža 1 project in Riga and the Madrid project in Sofia and scheduled settlements under the loans taken for its cash flow generating projects. The Group also followed the principal repayment schedules of the bank loans taken for Koduküla OÜ and the Laeva 2 project.

 

SERVICE DIVISION

In 2011, the performance of the Service division was in every respect better than in 2010. The division ended 2011 with an operating profit of 0.1 million euros compared with an operating loss of 0.4 million euros for 2010. The number of brokerage transactions increased by 29% and the number of valuation reports issued grew by 39% compared with 2010. At the same time, the number of brokers increased by only 1% and the number of appraisers grew by 17%.

         
    2011 2010 Change, %
Number of brokerage transactions conducted   1,411 1,090 29%
Number of projects on sale at end of period   139 130 7%
Number of valuation reports issued   5,822 4,196 39%
Number of appraisers at end of period*   42 36 17%
Number of brokers at end of period*   73 72 1%
Number of staff at end of period   45 55 -18%
* Includes people working under service contracts.        


DEVELOPMENT DIVISION

In 2011, 111 apartments and plots were sold in Arco Vara’s projects of: 17 apartments in the Bišumuiža project and 3 plots in the Baltezers project in Latvia, 56 apartments in the Kodukolde project and 4 plots in the Merivälja project in Estonia, and 31 apartments in the Madrid project in Sofia in Bulgaria.

In the Tivoli project, the Development division partnered up with International Invest Project OÜ and raised financing for phase I. In the reporting period contaminated land was remediated and design work was launched. In the fourth quarter, Tivoli Arendus OÜ was issued a permit for the construction of six residential buildings. According to plan, construction will start in spring 2012.

Phase V of the Kodukolde development project (50 apartments) was completed in June. By the end of the fourth quarter, only one apartment was still unsold. It is used as a show apartment to support sales and promote conclusion of preliminary contracts on the sale of apartments in phase VI. The construction of phase VI at Helme 16 in Tallinn (48 apartments) began in the second quarter of 2011. The work is performed and financed by AS Merko Ehitus Eesti. The buildings are scheduled for completion in the first half of 2012.

The Alasniidu nursery school building was granted a use permit at the end of May and was delivered to Harku local government with whom a rental agreement had been signed. The entity that owns the nursery school was sold in the second quarter of 2011 and with this the project was successfully completed.

At the end of the first quarter, Lilletee LA OÜ, a wholly-held subsidiary of Arco Investeeringute AS, acquired the right of superficies on the property at Lille tee 23 in Viimsi with a view to building a nursery school for six groups of children. In March 2011, a long-term lease agreement was signed with Viimsi local government. The nursery school should be completed in the first quarter of 2012. Construction work is performed by YIT. In September 2011, Arco Investeeringute AS sold its 100% interest in Lilletee LA OÜ but will remain the project manager until the nursery school is completed.

In Bulgaria, the construction of phase I of the Manastirski project is under way. At the reporting date, 65% of the apartments were reserved. In the commercial and residential building Boulevard Residence Madrid in Sofia the division continues to lease out commercial premises, to deliver reserved apartments under real right contracts, and to sell the remaining free apartments.

At the end of 2011, the Development division employed 24 people (31 December 2010: 26).

For further information on our projects, please refer to: www.arcorealestate.com/development

CONSTRUCTION DIVISION

The Construction division is generally actively involved in environmental, infrastructure and civil engineering (mostly educational establishments-related) projects.

At the end of 2011, the largest active construction contracts comprised the design and build of water and wastewater pipelines for the city of Loksa (remaining balance 3.1 million euros) and the design and build of the reconstruction and extension of the public water and wastewater systems of the Suure-Jaani rural municipality (part 1 with the remaining balance of 2.1 million euros and part 2 with the remaining balance of 2.4 million euros).

In 2011, the division secured new construction contracts of 10.9 million euros. At the reporting date, the order backlog stood at 11.7 million euros compared with 16.8 million euros at the end of 2010.

At the end of 2011, the Construction division employed 58 people (31 December 2010: 49).


Consolidated statement of comprehensive income

  Note   12M 2011 12M 2010   Q4 2011 Q4 2010
In thousands of euros              
Revenue from rendering of services     23,214 11,583   6,934 3,051
Revenue from sale of goods     19,918 9,550   4,885 3,744
Total revenue 2   43,132 21,133   11,819 6,795
               
Cost of sales 3   -42,790 -16,237   -12,150 -4,025
Gross profit/loss     342 4,896   -331 2,770
               
Other income 6   3,049 1,712   3,031 1,462
Distribution expenses 4   -346 -302   -65 -86
Administrative expenses 5   -3,903 -4,041   -933 -1,330
Other expenses 6   -634 -2,394   -526 -2,274
Operating profit/loss     -1,492 -129   1,176 542
               
Finance income 7   586 1,682   84 1,357
Finance expenses 7   -2,725 -1,821   -1,256 -930
Profit/loss before tax     -3,631 -268   4 969
               
Income tax expense/income     0 -26   0 4
Profit/loss for the period     -3,631 -294   4 973
   Profit/loss attributable to owners of the parent     -3,621 -281   13 975
   Loss attributable to non-controlling interests     -10 -13   -9 -2
Other comprehensive income:              
Exchange differences on translating foreign operations   0 0   0 -11
Total comprehensive income for the period     -3,631 -294   4 962
 Total comprehensive income
 attributable to owners of the parent
    -3,621 -281   13 975
Total comprehensive income attributable  to non-controlling interests     -10 -13   -9 -13
               
Earnings per share (in euros) 8            
- Basic     -0.76 -0.06   0.00 0.21
- Diluted     -0.76 -0.06   0.00 0.21


Consolidated statement of financial position

  Note   As at 31 December 2011 As at 31 December 2010
In thousands of euros        
Cash and cash equivalents     2,209 4,209
Trade and other receivables 9   7,012 5,760
Prepayments     309 192
Inventories 10   21,688 35,740
Non-current assets held for sale     469 0
Total current assets     31,687 45,901
         
Investments     12 996
Trade and other receivables 9   3,058 76
Investment property 11   24,046 22,887
Property, plant and equipment     934 703
Intangible assets     26 20
Total non-current assets     28,076 24,682
TOTAL ASSETS     59,763 70,583
         
Loans and borrowings 12   9,662 27,126
Trade and other payables 13   7,735 4,813
Deferred income     2,012 4,859
Provisions     1,205 1,378
Total current liabilities     20,614 38,176
         
Loans and borrowings 12   14,675 3,855
Payables 13   741 724
Total non-current liabilities     15,416 4,579
TOTAL LIABILITIES     36,030 42,755
         
Share capital  14    3,319 3,030
Statutory capital reserve     2,011 2,011
Retained earnings     18,403 22,787
Total equity     23,733 27,828
         
Equity attributable to n on-controlling interests     155 -70
Equity attributable to equity holders of the parent     23,578 27,898
         
TOTAL LIABILITIES AND EQUITY     59,763 70,583

  
Consolidated statement of cash flows

  Note   12M 2011 12M 2010
In thousands of euros        
Loss for the period     -3,631 -293
Interest income and interest expense, net 7   1,381 1,161
Gain/loss on sale of subsidiaries and interests in joint ventures 7   -285 -85
Share of profits and losses of joint ventures under the equity method 7   914 182
Gain/loss on other long-term investments     88 -1,166
Depreciation, amortisation and impairment losses on property, plant and equipment and intangible assets 3, 5   99 135
Gain/loss on sale of property, plant and equipment and intangible assets 6   28 3
Change in the fair value of investment property 11   -2,998 1,711
Gain/loss on sale of investment property 6   92 21
Gain/loss on changes in the value of inventories and receivables 3, 5   1,345 -1,079
Foreign exchange gains and losses 7   7 -67
Income tax paid     0 26
Operating cash flow before working capital changes     -2,960 549
Change in receivables and prepayments     -2,471 826
Change in inventories     4,749 2,396
Change in payables and deferred income     12 -2,021
NET CASH USED IN/FROM OPERATING ACTIVITIES     -670 1,750
         
Acquisition of property, plant and equipment and intangible assets     -94 -40
Proceeds from sale of property, plant and equipment and intangible assets     5 2
Paid on development of investment properties     -967 -238
Proceeds from sale of investment properties     774 1,568
Acquisition of subsidiaries and interests in joint ventures     -4 -32
Proceeds from disposal of subsidiaries and interests in joint ventures     893 1,477
Proceeds from sale of other investments     0 3,323
Loans granted     -631 -231
Repayment of loans granted     114 5
Interest received     197 243
NET CASH FROM INVESTING ACTIVITIES     287 6,077
         
Proceeds from loans received 12   6,646 4,164
Settlement of loans and finance lease liabilities 12   -6,308 -9,675
Interest paid     -1,955 -2,241
NET CASH USED IN FINANCING ACTIVITIES     -1,617 -7,752
         
NET CASH FLOW     -2,000 75
         
Cash and cash equivalents at beginning of period     4,209 4,137
Decrease/increase in cash and cash equivalents     -2,000 75
Effect of exchange rate fluctuations on cash held     0 -3
Cash and cash equivalents at end of period     2,209 4,209

  
Lembit Tampere

Arco Vara AS
Jõe 2b, 10151 Tallinn, Estonia
tel: +372 614 4630
gsm: +372 510 9959
fax: +372 614 4646
 


Members of the supervisory board of Arco Vara AS Kalev Tanner and Ragnar Meitern have submitted letters of resignation stating their intent to step down from the company’s supervisory board. Toletum OÜ has proposed Stefan David Balkin and Toomas Tool as new members of the supervisory board.

According to the articles of association of Arco Vara AS, the company’s supervisory board has to have 5 to 7 members. After the resignation of Ragnar Meitern and Kalev Tanner the supervisory board would have three members. Accordingly, at least two new members have to be appointed.

Toletum OÜ, a company controlled by the chairman of the supervisory board Richard Tomingas, which holds 1,024,681 shares in Arco Vara AS that represent 21.6% of the votes determined by shares, has submitted an application requesting that an extraordinary general meeting be called for appointing Stefan David Balkin and Toomas Tool as new members of the supervisory board that would replace the members who are stepping down. In accordance with the Estonian Commercial Code, an extraordinary general meeting is not called for the appointment of members of the supervisory board if the annual general meeting is going to take place within two months.

The annual general meeting is held no earlier than three weeks after the audited annual report has been released. The audited annual report and the notice of an annual general meeting will be published on 20 April 2012. According to the Commercial Code, the agenda, the time and the place of the annual general meeting have to be published in one national newspaper no less than three weeks before the meeting. The annual general meeting will take place on 15 May 2012. The exact time and place will be published on 20 April 2012 in the notice of the general meeting.  In response to the application of Toletum OÜ, the agenda will include an item concerning the appointment of new members of the supervisory board.

 

Lembit Tampere
Member of the Management Board
Arco Vara AS
Tel: +372 614 4630


Arco Vara AS’s shareholder Toletum OÜ, which holds 1,024,681 shares in Arco Vara AS that account for 21.61% of the votes represented by shares, is calling an extraordinary general meeting of the company’s shareholders to be held on 30 April 2012 at 9:00 in Tallinn, in the Conference Centre of the Radisson Blu Hotel located at Rävala puiestee 3.

Proposed agenda:
Election of new members of the supervisory board in place of the resigned members.

In connection with the resignation of the members of the supervisory board of Arco Vara AS, Kalev Tanner and Ragnar Meitern, the supervisory board of Arco Vara AS will have three members. According to the company’s articles of association, the supervisory board has to have five to seven members. Toletum OÜ proposes that Stefan David Balkin and Toomas Tool be elected as new members of the supervisory board.

In connection with the calling of an extraordinary general meeting, the election of members of the supervisory board will not be included in the agenda of the annual general meeting to be held on 15 May 2012, in respect of which a stock exchange announcement was released on 30 March 2012. 

Materials concerning the meeting and drafts of proposed resolutions will be made available on the company’s website at: http://www.arcorealestate.com/en/investor-info/general. Questions regarding the agenda may be submitted to the management board of Toletum OÜ by calling +372 6 144 630.

The list of shareholders eligible to vote is prepared seven days before the general meeting, i.e. as at 23 April at 23:59.

Registration of participants in the extraordinary general meeting begins on 30 April 2012 at 8:45. For registration, please bring an identity document. A shareholder’s representative must have a written proxy or other documents verifying the right to represent.

Yours sincerely

Lembit Tampere
Mermber of the Management Board
Arco Vara AS
Tel. 6 144 630