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AGM 2015

Resolutions of the annual general meeting

The general meeting of shareholders of AS Merko Ehitus was held on April 29th 2015 and the following decisions were made:

1. Approval of the annual report of the year 2014 and overview of the financial results and the prospective of the on-going year
The general meeting of shareholders decided to approve the annual report of the year 2014 and take note of the Management Board’s overview of the financial results and prospective outlooks of the on-going year.

Comment from the Management Board
Given the unsettled conditions, we can be quite satisfied with the results for 2014 – especially improved profitability, growth in sales in Latvia and Lithuania and apartment sales in Estonia. Yet the volume of new construction contracts on the Baltic market has gradually declined since 2014, particularly in the field of civil engineering, due to the decrease in European Union funded projects. In addition, slow economic growth and low investor confidence is dampening private sector initiative in commercial real estate development; often developers have a shortage of equity. This results in a longer construction project preparation times and has a negative impact on the volume of contracts for office, retail, production and other commercial buildings.
The construction market’s growth prospects depend largely on how rapidly new public procurements can be launched. We forecast a moderate rebound in this area starting in 2016. Because of the drop in state contract volumes, our priorities in all three Baltic states are pursuing good cooperation with private customers, offering them high-quality, optimum construction solutions, an efficient construction process, and the certainty that projects will be completed on schedule. In 2015, we see growth opportunities in Lithuania, and expect procurement volumes to stay on par in the field of electrical construction, as these contracts depend on investments made by the transmission system operator and distribution grid companies.
After the last three years of fast growth, the Baltic apartment market is showing signs of stabilisation. Demand remains high for good living environments and high-quality residential construction, and we continue to deliver to our customers in this regard. The apartment market is also supported by low interest rates, relatively stable construction prices and growth in the population’s personal savings. As a result, the residential construction remains in our focus, and this year we plan to invest 45-50 million euros into development projects in the Baltic states.
The lower order volumes, the pressure of price competition on profit margins and increased contractual risks will be reflected in the results for 2015 and 2016. As demand on the Baltic construction market will continue to be muted for the next few years, construction companies will find cost-effectiveness and flexibility to be increasingly important in responding to changes in the market situation.

2. Proposal on distribution of profits
The general meeting of shareholders decided to:

  1. approve the net profit for the year 2014 as EUR 12,416,623;
  2. pay the shareholders the total amount of EUR 7,257,000 as dividends from net profit brought forward, which totals to EUR 0.41 per share;
    shareholders, entered into the share register of AS Merko Ehitus on May 22nd 2014, at 23.59, will be entitled to dividends;
    dividends will be paid to the shareholders on May 26th 2014 by transferring the amount concerned to shareholder’s bank account, linked to security account;
  3. the outstanding net profit will not be distributed.

3. Proposal on reduction of share capital
Considering the perspectives of the Baltic construction market in the coming years and the related need for capital by Merko Ehitus group, the share capital would be reduced in order to improve the group’s capital structure and support return on equity. AS Merko Ehitus lacks the need to possess share capital in the existing amount and the requirements that legislation imposes on share capital will also be fulfilled in the case of the reduced share capital.

Based on the above, the general meeting of shareholders decided to:

  1. reduce the share capital of the public limited company by EUR 4,071,000 from the current EUR 12,000,000 to EUR 7,929,000
  2. share capital will be reduced by way of reducing the book value of the shares by EUR 0.23 from the current EUR 0.677966 to EUR 0.447966;
    the number of shares will remain the same – 17,700,000 shares;
  3. pursuant to the articles of association of Merko Ehitus, the minimum share capital of the company is EUR 6,000,000 and the maximum share capital is EUR 24,000,000;
    after the registration of the reduction of share capital in the Commercial Register the new share capital will amount to EUR 7,929,000 which is in line with the company’s articles of association consisting of 17,700,000 shares, each with a book value of EUR 0.447966;
  4. shareholders, entered into the share register of AS Merko Ehitus on May 22nd 2015, at 23.59, will be entitled to the monetary payments from the reduction of share capital;
  5. the monetary payments to the shareholders in the amount of EUR 0.23 per share, related to the reduction of share capital shall be made within the period prescribed by law, i.e. latest within 3 (three) months after the registration of the reduction of share capital in the Commercial Register.

4. Appointment of auditor for the financial years of 2015-2017
The general meeting of shareholders decided to appoint AS PricewaterhouseCoopers the auditor of AS Merko Ehitus for the financial years of 2015 through 2017 and to pay to the auditing company for auditing as per contract to be entered into with AS PricewaterhouseCoopers.

AS Merko Ehitus Year Book 2014

AGM presentation

Response to question from shareholder


NOTICE ON CONVENING A REGULAR MEETING OF SHAREHOLDERS OF AS MERKO EHITUS

The Management Board of AS Merko Ehitus, registry code 11520257, seated at Järvevana tee 9G, Tallinn, 11314, will convene a regular meeting of shareholders of AS Merko Ehitus on Wednesday, April 29th 2014 at 10.00 at the Arcturus conference hall of Nordic Hotel Forum (Viru square 3, Tallinn).

The circle of shareholders, entitled for the participation in the general meeting, will be determined 7 days before the general meeting of shareholders is held, i.e. April 22rd 2015 at 23.59 o’clock. Registration of participants of the meeting is about to be opened on April 29th 2014 at 09.30.

Agenda of the general meeting:

1. Approval of the annual report of the year 2014 and overview of the economic results and the prospective of the on-going year

The Supervisory Board proposes to the shareholders to approve the annual report of the financial year 2014 of AS Merko Ehitus and to consider the Management Board’s overview of the economic results and prospective outlooks of the on-going year.

2. Proposal on distribution of profits

The Supervisory Board proposes to:

  • approve the net profit for the year 2014 as EUR 12,416,623;
  • pay the shareholders the total amount of EUR 7,257,000 as dividends from net profit brought forward, which totals to EUR 0.41 per share; shareholders, entered into the share register of AS Merko Ehitus on May 22nd 2014, at 23.59, will be entitled to dividends; dividends will be paid to the shareholders on May 26th 2014 by transferring the amount concerned to shareholder’s bank account, linked to security account;
  • the outstanding net profit will not be distributed.

3. Proposal on reduction of share capital

Considering the perspectives of the Baltic construction market in the coming years and the related need for capital by Merko Ehitus group, the share capital would be reduced in order to improve the group’s capital structure and support return on equity. AS Merko Ehitus lacks the need to possess share capital in the existing amount and the requirements that legislation imposes on share capital will also be fulfilled in the case of the reduced share capital.

Based on the above, the Supervisory Board proposes to:

  • reduce the share capital of the public limited company by EUR 4,071,000 from the current EUR 12,000,000 to EUR 7,929,000
  • share capital will be reduced by way of reducing the book value of the shares by EUR 0.23 from the current EUR 0.677966 to EUR 0.447966; the number of shares will remain the same – 17,700,000 shares;
  • pursuant to the articles of association of Merko Ehitus, the minimum share capital of the company is EUR 6,000,000 and the maximum share capital is EUR 24,000,000;
    after the registration of the reduction of share capital in the Commercial Register the new share capital will amount to EUR 7,929,000 which is in line with the company’s articles of association consisting of 17,700,000 shares, each with a book value of EUR 0.447966;
  • shareholders, entered into the share register of AS Merko Ehitus on May 22nd 2015, at 23.59, will be entitled to the monetary payments from the reduction of share capital;
  • the monetary payments to the shareholders in the amount of EUR 0.23 per share, related to the reduction of share capital shall be made within the period prescribed by law, i.e. latest within 3 (three) months after the registration of the reduction of share capital in the Commercial Register.

4. Appointment of auditor for the financial years of 2015-2017

The Supervisory Board proposes to appoint AS PricewaterhouseCoopers the auditor of AS Merko Ehitus for the financial years of 2015 through 2017 and to pay to the auditing company for auditing as per contract to be entered into with AS PricewaterhouseCoopers.

The Supervisory Board ascertains that the Supervisory Board is satisfied with the hitherto work of AS PricewaterhouseCoopers and hence makes a proposal to appoint the auditing company AS PricewaterhouseCoopers also for the following period.

Organisational issues

You’re asked to submit the following for the registration of participants of the general meeting:

  • Passport or ID document is required to identify natural persons-shareholders; a suitably prepared proxy is also required of representatives;
  • Representatives of a legal person-shareholders are required to provide an excerpt from an appropriate (business) register where the legal person is registered, which identifies the individual’s right to represent the shareholder (legal representation) and passport or identification document of the representative; if the type of representation is other that legal representation, a suitably prepared proxy must also be provided (authorities granted by transaction) and the representative’s passport or identification document. You are kindly asked to legalise the registration documents of a legal person, registered in a foreign country (with the exception of unattested proxy) or have them apostilled, if not provided otherwise by an international treaty. AS Merko Ehitus may register shareholders, who are legal persons registered in a foreign country, as participants of general meeting, when all the required information on the legal person and representative concerned are given in a notarised proxy, issued to the representative in a foreign country, and the proxy is acceptable in Estonia.

A shareholder may notify AS Merko Ehitus of appointing a representative and having withdrawn a proxy before the general meeting, by supplying a digitally signed proxy and other required documents by e-mail to the following address: group@merko.ee or delivering the written and signed documents on paper (proxy and other required documents) to the office of AS Merko Ehitus at Pärnu mnt 141 Delta Plaza 7th floor, Tallinn (on working days from 10.00 through 16.00) by April 28th 2015, 16.00, as latest, using the forms published by AS Merko Ehitus on its website at http://group.merko.ee/. It is not possible to vote electronically or by mail at the general meeting.

The annual report of AS Merko Ehitus for 2014 and the chartered auditor’s report are available for inspection at the website of NASDAQ Tallinn Stock Exchange at http://www.nasdaqomxbaltic.com or the group’s website at http://group.merko.ee.

Documents related to the regular meeting of shareholders of AS Merko Ehitus, including draft resolutions, annual report for the financial year 2014, chartered auditor’s report, proposals for distribution of profits and reduction of share capital and written report, drawn up for the annual report by the Supervisory Board, are available for inspection as of April 8th 2015 at the website of AS Merko Ehitus at http://group.merko.ee/ or on working days at 10.00-16.00 at Pärnu mnt 141 Delta Plaza 7th floor, Tallinn. Questions concerning the agenda of the regular meeting can be asked by sending them to the e-mail address group@merko.ee. Questions and answers will be disclosed at the website of AS Merko Ehitus on Internet.

Shareholders are entitled to be provided information concerning the business of AS Merko Ehitus from the Management Board at the regular meeting. The Management Board may refuse from giving the information, if there is a good reason to believe that this may cause material damage to the interests of the public limited company. Should the Management Board refuse to provide the information, the shareholder concerned may demand the general meeting to adopt a decision regarding the legitimacy of his/her demand or within two weeks of the general meeting occurrence file an application for proceedings on application to the court to demand the Management Board to supply the information.

Shareholders, holding shares, which represent at least 1/20 of the share capital of AS Merko Ehitus, may submit a draft resolution of each item on the agenda to the public limited company no later than 3 days prior to the general meeting, that is, until April 26th 2015, submitting it in writing to the following address: AS Merko Ehitus, Pärnu mnt 141 Delta Plaza 7th floor, 11314 Tallinn.

Shareholders, holding shares, which represent at least 1/20 of the share capital of AS Merko Ehitus, may demand that additional items are added to the agenda of the general meeting, provided that such a request has been submitted in writing at least 15 days prior to the general meeting, that is, until April 14th 2015, to the following address: AS Merko Ehitus, Pärnu mnt 141 Delta Plaza 7th floor, 11314 Tallinn.

Draft resolutions of the Regular General Meeting of Shareholders 29.04.2015

Decisions of the Supervisory Board meeting of AS Merko Ehitus

Information on shares and total number of votes, linked to the shares

Proxy

Notice on withdrawal of a proxy