The Annual General Meeting of Shareholders of Arco Vara AS was held on May 12, 2011 at Sokos Hotel Viru, Viru square 4, in Tallinn.
The Annual General Meeting of Shareholders of Arco Vara AS started at 9.10 a.m. and ended at 11.00 a.m. and it was competent to pass decisions regarding the items on the agenda. The agenda of the Annual General Meeting of Shareholders of Arco Vara AS was published in April 20, 2011 and supplement of agenda was published in May 4, 2011 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 Annual General Meeting of Shareholders of Arco Vara AS:
1. To approve the year 2010 Annual Report of Arco Vara AS.
2. To cover the net loss for the year ended 31 December 2010 of 4,591 thousand kroons (293 thousand euros) to retained earnings.
3. To appoint 1 auditor for one year (until the next Annual General Meeting of Shareholders) and to appoint KPMG Baltics AS as auditor, to appoint Eero Kaup as auditor in charge and to pay to the auditor the fee for the auditing of 2010 financial results according to the agreement to be signed between Arco Vara AS and KPMG Baltics AS.
4. To amend clauses 2.1. and 2.3. in the articles of association of Arco Vara AS as follows:
„2.1. The minimum amount of the Company’s share capital shall be 2,500,000 Euros and the maximum amount of the share capital shall be 10,000,000 Euros.” And
“2.3. The Company only owns registered shares of one type with a nominal value of 70 (seventy) Eurocents. Each share provides 1 (one) vote in the general meeting. No share certificate is issued for the shares. A share grants the shareholder the right to participate in the general meeting of shareholders and in the distribution of the profit and the remaining assets of the Company upon its termination, as well as other legal and statutory rights.”
5. The par value of existing shares of Arco Vara AS shall be rounded off to 0.7 euro, i.e. to the closest possible value, to which purpose the share capital of Arco Vara AS shall be increased by 288,631.79 euro through a bonus issue on account of retained earnings, so that the size of the share capital will be 3,319,194.90 euro. The recalculation of the par value of shares as a result of rounding off shall not have any legal consequences. The basis for the bonus issue is the Arco Vara AS annual report 2010 that was approved by the general meeting of the shareholders. The list of shareholders entitled to take part in the bonus issue shall be the list as of 23.05.2011 at 23:59. The par value of shares shall be increased by an entry in the commercial register, which will presumably take place before 01.06.2011
6. To perform a special audit in relation to Arco Vara AS participation in sales transactions as follows:
6.2. To charge the auditor for a special audit with the task of investigating the circumstances per each sales transaction and to present the auditor for a special audit with the following questions for each sales transactions (except in cases where the question itself is limited to the specific transaction):
6.2.1. To whom did Arco Vara sell its share in S.C.L-Base Project S.R.L (Romania), Tallinna Olümpiapurjespordikeskuse AS, Floriston Grupp OÜ, Arco Ärikeskuse OÜ and Saare Kinnistute OÜ and Wilson Kinnisvara OÜ?
6.2.2. On October 21, 2009, according to a publicly disclosed stock notice Arco Vara sold its shares in Tallinna Olümpiapurjespordikeskuse AS, Floriston Grupp OÜ and Arco Ärikeskuse OÜ to companies related to Marcel Vichmann and Olav Miil. To whom specifically where the aforementioned shares sold?
6.2.3. What was the sales price for the shares in UAB IKAS Projekt (Lithuania) and S.C.L-Base Project S.R.L (Romania)?
6.2.4. For what reasons were the shares in the daughter companies transferred?
6.2.5. Was the sale of shares more profitable for Arco Vara and/or shareholders than declining to sell the shares?
6.2.6. Did Arco Vara also offer the shares for sale to other potential buyers and what were the competing offers? On which grounds were the specific buyers chosen?
6.2.7. Have the conditions for the transfer of shares been fulfilled completely by this time? If the conditions for the transfer transactions have not been fulfilled then:
126.96.36.199. what kind of claims does Arco Vara have against the share buyers?
188.8.131.52. what kind of methods has Arco Vara implemented to satisfy or ensure the claims?
6.2.8. Was the sale of shares planned in Arco Vara financial year action plan, budget or other such document? If yes, then what kind of management body has approved or coordinated the budget or other such document?
6.2.9. Was the sale of shares approved by the supervisory board and, if yes, when?
6.2.10. How was the proposal and economic usefulness of the sale of shares justified to the supervisory board?
6.2.11. Did the supervisory board members present any dissenting opinions concerning the transfer of shares and, if yes, which?
6.2.12. Who among the Arco Vara management body members participated in the valuation of the share values and in the sales negotiations?
6.2.13. As of what date was the price of share determined?
6.2.14. What kinds of valuation methods were used to valuate the share prices and who carried out this valuation?
6.2.15. What was the share price per used valuation methods?
6.2.16. Was the right of pre-emption valid in the sale of shares? If yes, did other shareholders use the right of pre-emption?
6.2.17. Was the repurchase of shares by Arco Vara also stipulated in the contracts?
6.2.18. Can the Arco Vara management board confirm that the transactions did not damage the interests of the shareholders?
6.2.19. Was the approval of a person of a credit institution or other such body required to make a transaction and were the transactions coordinated with such a person?
6.3. According to Arco Vara AS stock notices, the largest sale of shares is the transaction disclosed on October 21, 2009 within the framework of which Arco Vara sold its shares in (1) Tallinna Olümpiapurjespordikeskuse AS, (2) Floriston Grupp OÜ and (3) Arco Ärikeskuse OÜ (henceforth all 3 units to be referred to as the joint entrepreneurs) to undisclosed companies for a total of 172 MEEK (11 MEUR), of which 55 MEEK (3,5 MEUR) is the amount paid for the sale of the joint entrepreneurs’ shares and stock (henceforth the shares) and 117 MEEK (7,5 MEUR) is the amount for which claims against the joint entrepreneurs were transferred.
On the basis of the above and in addition to the questions listed in item 2 of this special audit questionnaire, the auditor for the special audit is charged with answering the following questions about the sale of the shares and stock of the aforementioned joint entrepreneurs:
6.3.1. Who presented the management board with the proposal for the sale of specific shares and what was the reasoning behind this?
6.3.2. For what reason where the shares in the three joint entrepreneurs under question transferred in 2009?
6.3.3. On what grounds was the share of 12,5% in Floriston Grupp OÜ left unsold?
6.3.4. Why was the sales price of a 37,5% share in Floriston 5 500 000 kroons, if the Arco Vara prospectus and the May 26, 2010 Arco Vara stock notice valued the consolidated Floriston Grupp OÜ retained profits in the amount of a 12% share to be 37 943 987 kroons? According to the 2009 annual report of Floriston Grupp OÜ, Floriston had – as of December 31, 2009 – retained profits of 151 489 722 kroons, shareholder’s equity of 151533 722 kroons and maximum net dividends of 119 676 880 kroons, of which 37,7% was 44 878 830 kroons. Please to explain the principles of price formation in this transaction by Arco Vara.
6.3.5. How does the total loss of 150 MEEK (9,6 MEUR) from the sale of the shares listed in the October 21, 2010 stock notice come about and what are the reasons?
6.3.6. How does the total loss of 150 MEEK (9,6 EUR) described in the October 21, 2010 stock notice divide by shares sold? What is the transaction result when broken down by the sales of Tallinna Olümpiapurjespordikeskuse AS stock, Floriston Grupp OÜ share and Arco Ärikeskuse OÜ share?
6.3.7. What kind of claims have been relinquished along with the sale of shares and on which grounds was this considered to be necessary in the sales transactions?
6.3.8. Has the fulfillment of claims relinquished to Arco Vara been guaranteed and how?
6.3.9. Does the acquisition of claims by Arco Vara against the joint entrepreneurs improve Arco Vara’s liquidity position and does the acquisition of claim enable getting financial instruments to finance the construction of new residential building projects in Tallinn?
6.3.10. Did Arco Vara finance any residential building projects – and, if yes, which – from the money gained from the sale of stock/shares in Tallinna Olümpiapurjespordikeskuse AS, Floriston Grupp OÜ and Arco Ärikeskuse OÜ?
6.3.11. Are the residential building projects described in the October 21, 2010 stock notice more profitable from the position of Arco Vara, compared to the projects by the joint entrepreneur Tallinna Olümpiapurjespordikeskuse AS, Floriston Grupp OÜ and/or Arco Ärikeskuse OÜ?
6.3.12. Is the October 21, 2010 stock notice claim that during the next 10 years Arco Vara may receive additional income from the realization of the construction rights on estates that belong to Tallinna Olümpiapurjespordikeskuse AS, Floriston Grupp OÜ or Arco Ärikeskuse OÜ true and justified?
184.108.40.206. What kind of additional income would Arco Vara receive from the realization of construction rights on estates that belong to the joint entrepreneurs?
220.127.116.11. What is the size of the additional income Arco Vara may receive from the realization of construction rights on the aforementioned estates that belong to the joint entrepreneurs?
18.104.22.168. Is the alleged (additional) income gained by Arco Vara from the realization of construction rights of the joint entrepreneurs larger than the income that Arco Vara would have received in the situation where Arco Vara had not transferred its shares in the joint entrepreneurs?
6.3.13. What was the dynamic of the joint entrepreneurs’ stock and shares during the three years prior to the sale of the shares?
6.3.14. How big were the retained profits of Floriston Grupp OÜ at the moment the shares were valuated?
6.3.15. Was/is there a shareholder contract that applies to the shares?
6.4. To charge the management board with signing a contract for performing a special audit between Arco Vara AS and the auditor for a special audit or a respective company of auditors under the following conditions:
6.4.1. the deadline for preparing a special audit report is 3 months;
6.4.2. the maximum size for performing a special audit is 18 000 euros.
6.5. Every shareholder is entitled to review the special audit report and to make copies of it at the expense of Arco Vara AS. The special audit report shall not include information which damages the rights or business interests of Arco Vara AS.
The Annual General Meeting of Shareholders of Arco Vara AS was held according to law and Statute of Arco Vara AS.
Arco Vara AS
phone: +372 614 4630