Articles of Association

Articles of Association

I General Provisions

1.1 The business name of the public limited company (hereinafter company) is AS Harju Elekter
(abbreviated form Harju Elekter AS).
1.2 The company is seated in the town of Keila, Harju county, the Republic of Estonia.
1.3 The financial year of the company commences on 1 January and ends on 31 December.
1.4 The company together with its subsidiary companies forms a group.
1.5 The company has been founded for an unspecified term.

II Area of Activity

2.1 The areas of activity of the company are:
2.1.1 production of electrical switchboards, panels, consoles, substations and distributing units;
2.1.2 production of technological control equipment and control equipment for production processes;
2.1.3 production of harnesses, connection cables, including fibreoptic cables, and other electrical
equipment and components;
2.1.4 production of telecommunications equipment and parts thereof;
2.1.5 mechanical processing of metals and finishing of metal surfaces;
2.1.6 production of cutting instruments, tools and iron products;
2.1.7 production of other unclassified metal products;
2.1.8 wholesale and retail sale of household goods, including electrical products;
2.1.9 road transport, including passenger carriage and vehicle rental;
2.1.10 real estate transactions, real estate management, lease;
2.1.11 business and management consultations, management of companies (subsidiaries) as a holding
company, participation in the management of related companies.
2.2 The company may freely choose its areas of activity and the company may enter into all
transactions and carry out all operations not prohibited by law.

III Share Capital, Shares and Reserve Capital

3.1 The minimum share capital of the company is 5 000 000 (five million ) euros and the maximum
share capital is 20 000 000 (twenty million) euros.
3.2 The minimum number of no par value shares is 8 000 000 and the maximum number is
32 000 000.Each share grants one vote at the general meeting of shareholders. The company only has
registered shares. The company only has one class of shares and these give the same rights to the shareholders.
3.3 Contributions to share capital may be only monetary.
3.4 A share may be pledged or encumbered with a usufruct.
3.5 A share may be freely transferred.
3.6 The company may issue convertible bonds by a resolution of the general meeting.
3.7 The company shall form a reserve capital, the amount of which shall be at least one-tenth of the share capital.
One-twentieth of net profit shall be transferred to reserve capital every year until the above amount is reached.

IV General Meeting of Shareholders

4.1 The general meeting of shareholders (hereinafter general meeting) shall be held at a time and
in a place designated by the management board in concordance with the supervisory board.
The supervisory board shall determine the agenda of the general meeting.
4.2 The management board shall call the annual general meeting not later than within six months
after the end of the financial year. A special general meeting shall be called pursuant to the
procedure provided by law.
4.3 The shareholders shall be notified of the annual general meeting no later than three weeks
prior to the general meeting. A notice of the general meeting shall be published in at least one
national newspaper no later than three weeks prior to the general meeting.
4.4 The general meeting has a quorum if more than one-half of the votes represented by the shares
of the company are present. If the required number of votes is not represented at the general
meeting, the management board shall call a new meeting with the same agenda within three
weeks, but not earlier than in seven days. The new general meeting is competent to adopt
resolutions regardless of the number of votes represented at the meeting.
4.5 A resolution of the general meeting shall be adopted if more than one-half of the votes
represented at the general meeting are in favour, unless otherwise prescribed by law or these
articles of association.
4.6 Resolutions on the amendment of and ratification of new articles of association, on changing
the amount of share capital, on the removal of a member of the supervisory board, and on the
dissolution, division, merger and transformation of the company shall be adopted if not less
than two-thirds of the votes represented at the general meeting are in favour.
4.7 The shareholders may vote on the draft resolutions prepared in respect to the items on the
agenda of a meeting of shareholders using electronic means prior to the meeting or during
the meeting if it is specified in the notice convening the general meeting. The procedure
for electronic voting shall be determined by the management board. The notice convening
the general meeting shall specify whether electronic voting is possible and the manner for
examining the procedure of electronic voting established by the management board. The
shareholder who voted using electronic means shall be deemed to have taken part in the
meeting and the votes represented by the shareholder’s share shall be accounted as part of
the quorum of the meeting unless otherwise provided by law.

V Supervisory Board

5.1 The supervisory board plans the activities of the company, organizes the management of the
company and supervises the activities of the management board. The supervisory board shall
present the results of control to the general meeting.
5.2 The supervisory board consists of 3 (three) to 5 (five) members. The general meeting elects
the chairman and members of the supervisory board for a term of 5 (five) years. The members
of the supervisory board elect a chairman and, if necessary, a vice chairman from among
themselves.
5.3 A supervisory board meeting has a quorum if more than one-half of the supervisory board
members are present. A resolution is deemed adopted if more than one-half of the members
present voted in favour. Upon an equal division of votes the chairman of the supervisory
board has the deciding vote.
5.4 The consent of the supervisory board is required for entering into transactions on behalf of
the company which are beyond the scope of everyday economic activities, particularly
transactions accompanied by:
5.4.1 the acquisition or termination of a holding in other associations;
5.4.2 the foundation, acquisition, transfer or dissolution of a company or enterprise, the
appointment of a representative of the company to the supervisory board of a
subsidiary or a related company;
5.4.3 the foundation or dissolution of foreign branches, the appointment of their
management;
5.4.4 the acquisition, transfer or encumbrance of immovables and the transfer or
encumbrance of registered movables;
5.4.5 the acquisition or transfer of non-current assets beyond the scope of the approved
annual budget and investment budget;
5.4.6 the making of investments beyond the scope of the approved annual budget and
investment budget;
5.4.7 the assumption of loans and debt obligations;
5.4.8 the granting of loans or the securing of debt obligations.
5.4.9 Electing and removing the members of the bodies formed by the supervisory board and
establishing the work procedure, unless otherwise provided by law.
5.5 The supervisory board may adopt a resolution to extend or restrict the list of transactions
for which the consent of the supervisory board is required for the management board.
5.6 The supervisory board is competent to decide upon the remuneration of members of the
management board of the company, as well as to approve the principles of payment of wages
and additional remuneration to the employees of the company.
5.7 The supervisory board approves the annual budget and investment budget of the company,
on which basis the management directs the economic activities of the company.
5.8 The supervisory board is also competent to decide upon other matters not placed in the
competence of the management board or the general meeting pursuant to law or these
articles of association.
5.9 The supervisory board may increase the share capital by up to 10%.
5.10 In order to perform its functions, the supervisory board may examine all the documents of
the company, as well as to check the correctness of accounting, the existence of assets, the
compliance of the company’s activities with law, the articles of association and the
resolutions of the general meeting.
5.11 In the absence of the chairman of the supervisory board the chairman shall be replaced by
the vice chairman or a supervisory board member authorized by the chairman.
5.12 Supervisory board meetings shall take place as necessary, but not less frequently than once
in a calendar quarter. Minutes shall be taken of a supervisory board meeting. The minutes
shall be signed by all supervisory board members present at the meeting, the chair of the
meeting and the minutes secretary.

VI Management Board

6.1 The management board is a directing body of the company which represents and manages
the company and organizes its activities and accounting.
6.2 The management board consists of 1 (one) to 5 (five) members. The supervisory board elects
the chairman of the management board of the company and, at his or her proposal, the
management board members for a term of three years.
6.3 The chairman of the supervisory board shall enter into employment contracts with the
chairman and members of the management board on behalf of the company in accordance
with the resolution of the supervisory board.
6.4 The management board shall comply with the resolutions of the supervisory board upon
performing its management functions. The management board is obliged to act in the most
economically purposeful manner.
6.5 The management board shall prepare and submit to the supervisory board for approval the
budgets specified in clause 5.7. of these articles of association.
6.6 The management board may enter into transactions which are beyond the scope of everyday
economic activities only with the consent of the supervisory board.
6.7 Members of the management board of the company may not participate in voting if approval
of the conclusion of a transaction between the member and the company is being decided,
and also if approval of the conclusion of a transaction between the company and a legal
person in which the management board member or those close to him or her have a
qualifying holding is being decided.

VII Liability of Supervisory Board and Management Board

7.1 Members of the supervisory board and management board shall be liable for violation of the
requirements of law or the articles of association and for failure to perform their duties
pursuant to the applicable laws of the Republic of Estonia.

VIII Right of Representation

8.1 Every member of the management board may represent the company in all legal acts.

IX Economic Activity Reports

9.1 The management board shall submit to the supervisory board a review of the economic
activities and economic situation of the company at least once every three months, and shall
forthwith provide notice of any substantial deterioration of the economic situation of the
company and of other important circumstances relating to the economic activities of the
company.
9.2 After the end of the financial year, the management board shall submit the annual accounts,
activity report and profit distribution proposal together with the auditor’s report to the
supervisory board for review and to the general meeting for approval.
9.3 The supervisory board shall review the annual report and prepare a written report on it,
which shall be submitted to the general meeting. The supervisory board shall indicate in the
report whether it approves the report prepared by the management board and how the
supervisory board has organized and directed the activities of the company.

X Auditor and Special Audit

10.1 Auditors shall be appointed by the general meeting, who shall also determine the number of
auditors and the procedure for their remuneration. An auditor may be appointed for a term
or for performing specific tasks.
10.2 The conduct of a special audit of the management and proprietary status of the company, its
conductors and the procedure for their remuneration shall be decided by the general meeting,
if this is demanded by shareholders whose shares represent not less than one-tenth of the
share capital.
10.3 The conductors of special audit shall submit a report on the results of the special audit to the
general meeting.

XI Distribution of Profit

11.1 The profit distribution resolution shall be adopted by the general meeting and it shall set out:
11.1.1 the net profit;
11.1.2 transfers to reserve capital;
11.1.3 transfers of profit to other reserves;
11.1.4 the amount of profit to be paid to shareholders;
11.1.5 the use of profit for other purposes.
11.2 The supervisory board may amend the profit distribution proposal prior to submitting it to
the general meeting.
11.3 The shareholders shall be paid a part of the profit (dividend) in accordance with the book
value of their shares.
11.4 Dividends may be paid on the basis of the approved annual report. The procedure for the
payment of dividends shall be set out in a resolution of the general meeting.
11.5 The management board submits a dividend payment proposal concorded with the
supervisory board. The general meeting approves the amount of dividends.
11.6 The management board may cease to send dividend notices to shareholders to whose bank
account dividends cannot be transferred, if the making of payments has proved impossible
for two consecutive years.

XII Merger, Division, Transformation and Liquidation

12.1 The merger, division, transformation or liquidation of the company are subject to the
procedure provided by law.
12.2 The liquidators of the company shall be the management board members, unless otherwise
decided by the general meeting.
XIII FINAL PROVISIONS
In matters not regulated by these articles of association the company shall be guided by the
applicable laws and legislation of the Republic of Estonia.

These articles of association have been ratified by the resolution of the general meeting of
shareholders of Harju Elekter AS on 28th of April 2016.

 

Articles of Association of Harju Elekter (pdf)