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ARTICLES OF ASSOCIATION OF SAKU ÕLLETEHASE AKTSIASELTS

1. BUSINESS NAME, LOCATION AND LEGAL STATUS OF THE COMPANY

1.1. The company’s business name is Saku Õlletehase Aktsiaselts (in abbreviated form Saku Õlletehase AS; in English Public Limited Company Saku Brewery and Saku Brewery Ltd).

1.2. The company is located at Saku, Harju Maakond.

1.3. The company is a public limited company, established on 14 March 1995 under the laws of the Republic of Estonia through the transformation of joint venture Saku Õlletehas.

2. THE COMPANY’S AREAS OF ACTIVITY

2.1. The company’s areas of activity are:

2.1.1. production, whole- and retail sale, and import and export of alcoholic beverages and soft drinks;

2.1.2. supply in the customs zone of ships and other means of transportation with alcoholic beverages and soft drinks;

2.1.3. catering;

2.1.4. provision of consultations and other services relating to the above activities;

2.1.5. import of foodstuffs

3. SHARE CAPITAL AND SHARES

3.1. The company’s minimum share capital is eighty million (80,000,000) Estonian kroons and maximum share capital is three hundred and twenty million (320,000,000) Estonian kroons. Within these limits, share capital may be increased and reduced by the shareholders’ general meeting without amending the Articles of Association.

3.2. The company’s share capital is made up of registered shares with a face value of ten (10) Estonian kroons.

3.3. The shares are accounted for in a share register. No share certificates are issued.

3.4. Each share gives its holder one (1) vote at the shareholders’ general meeting.

3.5. The company may issue convertible bonds.

4. GENERAL MEETING

4.1. The company’s highest governing body is the general meeting.

4.2. The general meeting may be attended by shareholders, and proxies who have a written power of attorney. Attendance of a proxy does not deprive the shareholder of the right to attend.

At the general meeting, the shareholder has the right to receive from the management board information on the company’s activities. The management board may refuse to give information if there is reason to presume that this may cause significant damage to the company.

At the general meeting, a list of attending shareholders is prepared. The list must set out the names of the attending shareholders, the number of votes attached to their shares, and the names of the proxies. The list will serve as a basis for calculating the votes. The list is signed by the chair and secretary of the meeting, as well as all shareholders and proxies who are present.

4.3. Annual general meetings are held once (1) a year and are convened by the management board within six months of the end of the financial year.

4.4. The management board calls an extraordinary general meeting if:

4.4.1. the company’s net assets are smaller than one half of the share capital or the minimum prescribed by law;

4.4.2. this is demanded by shareholders whose shares represent at least one tenth of the share capital;

4.4.3. this is demanded by the supervisory board or the auditor.

If the management board does not convene the general meeting within one (1) month of the demand of the shareholders, the supervisory board or the auditor, the shareholders, the supervisory board or the auditor have the right to call the meeting themselves.
An extraordinary general meeting is not called if the time between becoming aware of the decrease in assets or the submission of a demand and the annual general meeting is less than two (2) months.

4.5. The general meeting is held at the company’s location or another location in the Republic of Estonia which is established by the management board.

4.6. The agenda of the general meeting is established by the supervisory board.

The management board, or shareholders whose shares represent at least one tenth of the share capital may demand the inclusion of a certain issue. The demand has to be submitted before notice of the general meeting is sent to the shareholders or published.

An issue, which is not initially on the agenda may be included with the consent of at least nine tenths of the shareholders who are present if their shares represent at least two thirds of the share capital.

4.7. The management board sends shareholders a notice of the general meeting. The notice is sent by registered mail to the address entered on the share register. If the company has more than 100 shareholders, notice of the general meeting is published in at least two Estonian national newspapers.

Notice of the annual general meeting must be given at least three (3) weeks in advance. Notice of an extraordinary general meeting must be given at least one (1) week in advance.

A notice calling a general meeting has to set out:

4.7.1. the company’s business name and location;

4.7.2. the time and place of the meeting;

4.7.3. an explanation of whether the meeting is annual or extraordinary;

4.7.4. the agenda;

4.7.5. in the case of the annual general meeting, the place where the annual report has been made available for examination;

4.7.6. other important circumstances.

4.8. The general meeting can:

4.8.1. amend the articles of association;

4.8.2. increase and reduce share capital;

4.8.3. elect and remove members of the supervisory board and decide their remuneration (amounts and procedure of payment);

4.8.4. elect an auditor or auditors for a non-recurring audit or a specified term (this includes deciding the number of auditors, appointing the auditors and determining a procedure of payment for their services);

4.8.5. prescribe a special-purpose audit;

4.8.6. approve the annual report and distribute the profits;

4.8.7. approve the amount of the dividend and the procedure for its distribution;

4.8.8. decide to use the capital reserve for covering a loss or increasing the share capital;

4.8.9. decide to merge, divide or transform the company;

4.8.10. decide to dissolve the company;

4.8.11. decide to file a claim against a member of the management or supervisory board or a shareholder, to enter into a transaction with a member of the supervisory board and to appoint the company’s representative in such a claim or transaction;

4.8.12. decide other matters provided for by law.

In other matters relating to the company’s activity, the general meeting may take decisions at the demand of the management board or supervisory board.

4.9. The general meeting may adopt a resolution if more than a half of the votes represented by the shares are present.

If the above number of votes is not represented, the management board will call another meeting with the same agenda within three (3) weeks but not before seven (7) days have passed. The new general meeting can adopt resolutions regardless of the votes represented at the meeting.

4.10. Minutes are taken of the general meeting. Written proposals and applications submitted to the general meeting, the list of shareholders who participated and the proxies’ powers of attorney are appended to the minutes.

The minutes are signed by the chair and the secretary of the meeting. A dissenting opinion is signed by the person who expressed it.

The minutes have to be available to the shareholders after seven (7) days have passed from the end of the general meeting. Shareholders have the right to receive a full or partial copy of the minutes.

4.11. A resolution of the general meeting is adopted if more than a half of the votes represented at the general meeting are in favour unless the law or the articles of association prescribe a greater majority requirement.

A shareholder cannot vote if release of the shareholder from obligations or liabilities, assertion of a claim against the shareholder or conclusion of a transaction between the shareholder and the company is being decided. The votes of this shareholder are not taken into account at determining the representation.

At the election of a person at the general meeting, the candidate who receives more votes than the others is considered elected. Upon an equal division of votes, lots are drawn.

At least two thirds of the votes represented at the general meeting have to be in favour:

4.11.1. for amendment of the articles of association;

4.11.2. for removal of a member of the supervisory board from office before expiry of the term of office;

4.11.3. for an increase or reduction of share capital;

4.11.4. for approval of the annual report and distribution of profits;

4.11.5. for deciding the dissolution of the company;

4.11.6. for deciding the continuation of the activities of a dissolved company in cases prescribed by law;

4.11.7. for adopting a decision on the company’s merger, division or transformation into a private limited company;

4.11.8. in other cases prescribed by law.

5. SUPERVISORY BOARD

5.1. The supervisory board:

5.1.1. plans the activities of the company: approves the company’s long-term strategic objectives, the budget for the next financial year and investments;

5.1.2. organises the management of the company: approves policies for the management of cash flows, indemnification and insurance, and taking of long- and short-term loans by the management board;

5.1.3. appoints and removes members of the management board, appoints the chairman of the management board and takes decisions regarding their remuneration (amount of remuneration and procedure for payment);

5.1.4. grants the management board consent for conclusion of transactions that do not fall within the scope of everyday economic activity and, above all, conclusion of transactions that are listed in article 6.2 of these Articles of Association;

5.1.5. supervises the activities of the management board;

5.1.6. appoints and removes procurators;

5.1.7. decides conclusion of transactions with the management board, conduct of legal disputes and appoints the company’s representative for such transactions and disputes;

5.1.8. fulfils other obligations provided for by law.

5.2. The supervisory board has three (3) to five (5) members.

A member of the supervisory board is elected by the general meeting for a term of three (3) years. For election of a member of the supervisory board, their written consent is required.

A member of the management board, procurator, bankrupt or person from whom the right to be a trader has been taken away under law cannot be members of the supervisory board.

Members of the supervisory board elect a chairman from among themselves. The chairman is responsible for organising the board’s activities.

5.3. Meetings of the supervisory board are held when necessary but not less frequently than once (1) in three (3) months. A meeting of the supervisory board is called if this is demanded by a member of the supervisory board, the management board, the auditor, or shareholders whose shares represent at least one tenth of the share capital.

A meeting is called by the chairman of the supervisory board or a member of the supervisory board who substitutes for the chairman. Notice of the meeting has to be given at least one (1) week in advance. If urgent decisions on significant matters have to be taken, the term of notice may be reduced to 24 hours.

5.4. A meeting of the supervisory board has a quorum if more than a half of the members of the supervisory board participate.

Minutes are taken of a meeting of the supervisory board. The minutes are signed by all members of the supervisory board who participated and the secretary. A dissenting opinion is entered in the minutes and signed by the member who expressed it.

5.5. A resolution of the supervisory board is adopted if more than a half of the members of the supervisory board who participate vote in favour.

Every member of the supervisory board has one (1) vote. A member of the supervisory board does not have the right to abstain from voting or to remain undecided.

A member of the supervisory board does not participate in voting if approval of a transaction between the member and the company is being decided, or if approval of a transaction between a third person and the company is being decided and the interests of the of the member arising from such a transaction are in conflict with the interests of the company.

The supervisory board has the right to adopt resolutions without calling a meeting if all members of the supervisory board agree to this. The chairman of the board sends a written draft of such a resolution to all members of the board, specifying a deadline by which members have to present their written opinions. If members of the board do not give notice of whether they are in favour of or opposed to the resolution by the specified deadline, it is considered that they are against the resolution. If a resolution is made using the procedure outlined in this Article, the resolution is adopted if more than a half of the members of the supervisory board are in favour, unless the law prescribes a greater majority requirement. The chairman of the supervisory board prepares a record of the vote that replaces the minutes of the meeting and sends it promptly to members of the supervisory board and the management board. The written positions of members of the supervisory board form an integral part of the record.

6. MANAGEMENT BOARD

6.1. The management board:

6.1.1. represents the company within its authority;

6.1.2. directs the company in accordance with the plans approved by the supervisory board;

6.1.3. presents the supervisory board an overview of the company’s business activity and financial position at least once in four (4) months and notifies the supervisory board promptly of any material deteriorations in the company’s financial position and other significant matters relating to the company’s business activity;

6.1.4. organises the accounting of the company;

6.1.5. organises the keeping of the share register in accordance with the procedure established by the supervisory board;

6.1.6. submits the general meeting a proposal for the amount to be distributed as dividends (the proposal must be approved by the supervisory board);

6.1.7. fulfils other obligations prescribed by law.

6.2. In directing the company, the management board must adhere to the lawful orders of the supervisory board.

The management board must act in a financially expedient manner.

Transactions that fall outside the scope of everyday business activity may only be concluded with the consent of the supervisory board. Above all, the management board needs the approval of the supervisory board for transactions involving:

6.2.1. acquisition or termination of interest in other undertakings;

6.2.2. acquisition, transfer or termination of the operation of an enterprise;

6.2.3. transfer and encumbrance of immovables and registered movables;

6.2.4. establishment and closure of foreign branches;

6.2.5. making investments that exceed the limit established for the financial year;

6.2.6. taking loans and accepting obligations that exceed the limits established for the financial year;

6.2.7. giving loans and securing obligations if the transactions fall outside the scope of everyday business activity.

The consent is not required if a delay in a transaction would cause significant damage to the company.

The above restrictions do not apply to third persons.

6.3. The management board has one (1) to ten (10) members.

Members of the management board are appointed by the supervisory board for a term of three (3) years. Appointment of a member of the management board requires the member’s written consent.

A member of the supervisory board, a bankrupt or a person from whom the right to be a trader has been taken away by law cannot be a member of the management board.

The residence of at least a half of the members of the management board must be in Estonia.

The supervisory board appoints the chairman of the management board who directs the activities of the board.

Relations between and division of tasks among members of the management board are established with a resolution of the management board, which is approved by the supervisory board, if necessary.

6.4. Every member of the management board can represent the company in all legally binding acts. The right of the management board to represent the company may be restricted with a resolution of the general meeting or the supervisory board. The restriction of the right of representation does not apply to third persons.

6.5. The meetings of the management board are held when necessary but not less frequently than once (1) a month.

A meeting is called by the chairman of the management board or a member of the management board who substitutes for the chairman.

6.6. A meeting of the management board has a quorum if more than a half of the members participate.

Minutes are taken of a meeting of the management board. The minutes are signed by the chairman of the management board or a member of the management board who substitutes for the chairman, and the secretary.

6.7. A resolution of the management board is adopted if more than a half of the members who participate in the meeting are in favour. In the case of a draw, the chairman of the management board or the member substituting for the chairman has the casting vote.
Every member of the management board has one (1) vote.

7. REPORTING AND DISTRIBUTION OF PROFITS

7.1. The company’s financial year is the calendar year.

7.2. The annual report comprises the annual financial statements, the activity report, the auditor’s report and the profit allocation proposal.

The annual report is prepared and submitted to the general meeting by the management board.

7.3. The supervisory board reviews the annual report and presents the general meeting a written report on it.

In the report, the supervisory board must indicate whether it approves the annual report. In addition, the report must indicate how the supervisory board has organised and directed the activity of the company.

The supervisory board can change the profit allocation proposal before its presentation to the general meeting.

7.4. The general meeting approves the annual report and adopts a profit allocation decision, which sets out the amount of net profit, transfers to capital reserve, transfers to other reserves, the share of the profit to be distributed to shareholders (the dividend) and the use of profit for other purposes.

7.5. The company’s capital reserve must amount to one tenth of its share capital. Every year the company must transfer to the capital reserve at least one twentieth of its net profit until the required level is attained.

8. MERGER, DIVISION, TRANSFORMATION AND DISSOLUTION OF THE COMPANY

8.1. The company can be merged, divided, transformed and dissolved in accordance with the procedure prescribed by law.

 

This version of the Articles of Association was approved by the annual general meeting of Saku Õlletehase Aktsiaselts of 7 April 2005

Jaak Uus
Chairman of the Management Board of Saku Õlletehase Aktsiaselts