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AGM 2006

RESOLUTIONS OF THE ANNUAL GENERAL MEETING

Resolutions of the annual general meeting of AS Merko Ehitus held on 19 May 2006:

I. Approval of Annual Report 2005

Having examined the annual accounts 2005, management report, auditor’s report and profit distribution proposal of AS Merko Ehitus (“the Annual Report”) it was resolved to approve Annual Report 2005 prepared by the Management Board and approved by the Supervisory Board of AS Merko Ehitus.

II. Resolution regarding profit distribution

It was resolved to distribute the profit of AS Merko Ehitus on the basis of the approved annual accounts and in accordance with the profit distribution proposal presented to the general meeting as follows:

(i) to approve the net profit of the financial year of 2005 in the amount of 438 637 484 Estonian kroons (28 034 045 euros);

(ii) to pay dividends to shareholders from the net profit of 2005 in the total amount of 88 500 000 Estonian kroons (5 656 181 euros), which makes 5 kroons (0,3196 euros) per share;

all shareholders entered in the share ledger of AS Merko Ehitus as of 5th June 2006 at 8:00 hours AM are entitled to dividends;

dividends shall be paid to shareholders on 8th June 2006 by remitting the respective amount to the current account tied to the shareholder’s securities account;

(iii) to increase the mandatory legal reserve by the amount of 8 850 000 Estonian kroons (565 618 euros);

(iv) to maintain the rest of the net profit undivided.

III. Appointment of auditor for financial year 2006

It was resolved to approve the auditing company AS PricewaterhouseCoopers to be the auditor of AS Merko Ehitus in the financial year 2006 and to pay them for the service in accordance with the contract to be entered into with them.

IV. Election of Supervisory Board members and deciding on the remuneration of Supervisory Board members.

It was resolved to elect the new Supervisory Board of AS Merko Ehitus in the following composition: Toomas Annus, Teet Roopalu and Jaan Mäe, to pay remuneration to the Supervisory Board members and conclude respective contracts of service with the Supervisory Board members on the following new terms and conditions:

1) Remuneration:

Supervisory Board members are paid monthly remuneration for the performance of their duties as follows:

– Chairman of the Supervisory Board – 50 000 Estonian kroons
– Member of the Supervisory Board – 45 000 Estonian kroons

2) Additional remuneration:

Supervisory Board members are entitled to the following additional remuneration:

– Chairman of the Supervisory Board – 0.22% of the profit of the company before the income tax, from which the respective minority share has been deducted;
– Member of the Supervisory Board – 0.2% of the profit of the company before the income tax, from which the respective minority share has been deducted;

The additional remuneration is paid after the approval of the annual report of the respective financial year at the general meeting of shareholders. The Supervisory Board members may be paid in the form of advance payments in the maximum extent of 75% of the above additional remuneration.

All other conditions of the contracts of service will remain as resolved in annual general meeting of shareholders in 2003.


ANNUAL GENERAL MEETING POSTPONED

The Management Board of AS Merko Ehitus hereby announces the postponement of the regular annual general meeting of shareholders. The updated date of the annual general meeting of shareholders is 19 May 2006 at 15:00 PM in the “Stuudio II+III” conference room of the hotel Central at 7c Narva St, Tallinn. The suffrage of the shareholder at the general meeting will be determined on the basis of the minutes book as of 09.05.2006 at 8:00 AM. The registration of the participants of the meeting will start on the 19th of May 2006 at 14:30 PM.

The postponement of the meeting is due to a misunderstanding in following procedure. According to the Commercial Code § 294 (5) the notice calling a general meeting must include a proposal by the supervisory board for each item on the agenda. The supervisory board of AS Merko Ehitus announced the agenda of the annual general meeting and the proposals of the supervisory board through the stock exchange on 30.03.2006. The notice calling a general meeting published in Eesti Päevaleht on 31.03.2006 included the agenda of the meeting without the information that the supervisory board proposes adopting all items on the agenda.

The management board and the supervisory board of AS Merko Ehitus apologize for the inconvenience caused to the shareholders.

Agenda of the meeting:

1. Approval of the 2005 annual report;
Supervisory board proposes approving the annual report of AS Merko Ehitus for 2005.

2. Deciding the profit distribution;
Supervisory board proposes approving the following profit distribution proposal:

(i) to approve the net profit of the financial year of 2005 in the amount of 438 637 484 Estonian kroons (28 034 045 euros);

(ii) to pay dividends to shareholders from the net profit of 2005 in the total amount of 88 500 000 Estonian kroons (5 656 181 euros), which makes 5 kroons (0,3196 euros) per share;

all shareholders entered in the share ledger of AS Merko Ehitus as of 5th June 2006 at 8:00 hours AM are entitled to dividends;

dividends shall be paid to shareholders on 8th June 2006 by remitting the respective amount to the current account tied to the shareholder’s securities account;

(iii) to increase the mandatory legal reserve by the amount of 8 850 000 Estonian kroons (565 618 euros);

(iv) to maintain the rest of the net profit undivided.

3. Appointment of auditor for financial year of 2006.
Supervisory board proposes approving the auditing company AS PricewaterhouseCoopers to be the auditor of AS Merko Ehitus in the financial year 2006 and to pay them for the service in accordance with the contract to be entered into with them.

4. Election of supervisory board members and deciding on the remuneration of supervisory board members.
Supervisory board proposes electing the new supervisory board of AS Merko Ehitus in the following composition: Toomas Annus, Teet Roopalu and Jaan Mäe, to pay remuneration to the supervisory board members and conclude respective contracts of service with the supervisory board members on the following new terms and conditions:

1) Remuneration:

Supervisory board members are paid monthly remuneration for the performance of their duties as follows:

– Chairman of the supervisory board – 50 000 Estonian kroons
– Member of the supervisory board – 45 000 Estonian kroons

2) Additional remuneration:

Supervisory board members are entitled to the following additional remuneration:

– Chairman of the supervisory board – 0.22% of the profit of the company before the income tax, from which the respective minority share has been deducted;
– Member of the supervisory board – 0.2% of the profit of the company before the income tax, from which the respective minority share has been deducted;

The additional remuneration is paid after the approval of the annual report of the respective financial year at the general meeting of shareholders. The supervisory board members may be paid, in the form of advance payments, to the maximum extent of 75% of the above additional remuneration.

All other conditions of the contracts of service will remain as resolved in annual general meeting of shareholders in 2003.

Further information about Jaan Mäe:

Jaan Mäe graduated from Tallinn Technical University in 1991 holding a degree in industrial and civil engineering and is working in AS Merko Ehitus since 1997:

1997-1999 AS Merko Ehitus, site manager;
1999-2001 AS Merko Ehitus, project manager;
2001-2004 AS Merko Ehitus, director of residential construction division;
2004-2006 AS Merko Ehitus, management board member.

Jaan Mäe is a member of the management board of AS Merko Ehitus and a member of the management teams of various subsidiaries of AS Merko Ehitus.

Jaan Mäe does not own shares of AS Merko Ehitus.

Upon registration the legitimate representatives of the corporate shareholders are asked to submit the documents which would confirm their right to representation. For the board members of a corporate body it is a copy of the registration card of the company, for the authorized representatives it is the authorization from the board or its substitute and a copy of the registration card of the company. The document for personal identification will be required. The individual shareholders will be asked to submit the document for personal identification, a representative will be asked to submit also the authorization. A passport or other identity document containing the photograph, name, and personal identification code of the person and the name of the state agency having issued the document is acceptable as an identity document.

The annual report 2005 will be available for viewing at Internet homepages of Tallinn Stock Exchange (www.ee.omxgroup.com) and Merko Ehitus (www.merkoehitus.ee), and on every workday from 8:00 AM to 5:00 PM at the office of AS Merko Ehitus, 9G Järvevana road, Tallinn.

For any further questions concerning the general meeting, please contact us by telephone +372 6 805 105 or by e-mail merko[A]merko.ee.