On 19 October 2007 AS Eesti Ehitus (“Eesti Ehitus”) concluded an agreement whereby Eesti Ehitus shall purchase from 15 individuals and one company (the “Sellers”) altogether 5,203 shares in Aktsiaselts Eston Ehitus (“Eston Ehitus”), which represent 52 per cent. of the share capital of Eston Ehitus. The obligations of Eesti Ehitus under the referenced agreement (except for the obligation to do its best efforts to ensure the receipt of the approval of the Estonian Competition Board for the transaction) shall become effective only in case the following conditions are fulfilled: (i) all Sellers have provided Eesti Ehitus with written consents of their spouse or ex-spouse for transfer of the relevant shares in Eston Ehitus and for the transactions stipulated in the agreement, if such a consent is required, and (ii) the Estonian Competition Board has granted its approval to the concentration resulting from the agreement. On the terms and conditions stipulated in the agreement, Eesti Ehitus is obliged to acquire from any Seller all the shares in Eston Ehitus belonging to such Seller following the transfer of the shares in Eston Ehitus under the agreement. Eston Ehitus is an Estonian company, which was established in 1991 and is mainly active in construction of buildings. Eston Ehitus has specialised in general contracting. Eston Ehitus is also active in real estate development, restoration and concrete works. Eston Ehitus is mainly active in West-Estonia and in Tallinn, its headquarters are located in Pärnu. Eston Ehitus has about 60 employees. The main objective of Eesti Ehitus in acquiring the shareholding is to fulfil the company's development strategy in the home market in order to ensure the increase of competitiveness in all its main fields of activity throughout the country. The financial indicators of Eston Ehitus shall be consolidated with the financial indicators of Eesti Ehitus in a line-by-line method as of the acquisition, which means that the indicators of Eston Ehitus for previous periods do not have an effect on the consolidated financial results. Eesti Ehitus confirms that the transaction does not constitute a transaction with connected persons within the meaning of the Tallinn Stock Exchange Rules and the members of the supervisory council and management board of Eesti Ehitus are otherwise not personally interested in the transaction. The total sum payable for the shares in Eston Ehitus is 187,235,158 Estonian kroons, which is 35,986 Estonian kroons for each share to be purchased. Eesti Ehitus shall transfer the part of the purchase price to be transferred to each Seller on 11 January 2008 at the latest, provided that all shares to be transferred, i.e. 5,203 shares in Eston Ehitus, have been received on the securities account of Eesti Ehitus. The results of Eston Ehitus during the financial years 2004-2006 Information from the income statement (in Estonian kroons) -------------------------------------------------------------------------------- | | | 2004 | 2005 | 2006 | -------------------------------------------------------------------------------- | Revenue | 118,002,054 | 207,588,790 | 159,618,195 | -------------------------------------------------------------------------------- | Other operating income | 68,886 | 81,273 | 137,756 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in the stock of finished | 2,081,118 | -7,381,942 | -1,337,387 | | and unfinished output | | | | -------------------------------------------------------------------------------- | Expenses of capitalised production | -97,380,750 | 0 | 9,976,976 | -------------------------------------------------------------------------------- | Goods, commodities, material and | -2,293,764 | -157,993,89 | -142,131,75 | | services | | 6 | 9 | -------------------------------------------------------------------------------- | Other operational expenditure | | -3,920,996 | -2,573,654 | -------------------------------------------------------------------------------- | Labour costs | | | | -------------------------------------------------------------------------------- | | Salary costs | -6,896,820 | -8,904,148 | -9,243,117 | -------------------------------------------------------------------------------- | | Social tax expenses | -2,308,461 | -2,976,620 | -3,076,457 | -------------------------------------------------------------------------------- | Net labour costs | -9,205,281 | -11,880,768 | -12,319,574 | -------------------------------------------------------------------------------- | Depreciation and decrease of value | -794,127 | -831,625 | -803,268 | | of non-current assets | | | | -------------------------------------------------------------------------------- | Other operating expenses | -547,904 | -2,017,037 | -797,530 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit before financing | 9,930,232 | 23,643,799 | 9,769,755 | | items | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financing items | | | | -------------------------------------------------------------------------------- | Financial income and expenses from | -81,481 | -92,442 | 5,102,955 | | investments in associates | | | | -------------------------------------------------------------------------------- | Financial income and expenses from | 61,100 | 122,200 | 183,300 | | other long-term investments | | | | -------------------------------------------------------------------------------- | Interest expenses | -12,904 | 474,214 | 494,628 | -------------------------------------------------------------------------------- | Loss from changes in exchange | | | -509 | | rates | | | | -------------------------------------------------------------------------------- | Net financing costs | -33,285 | 503,972 | 5,780,375 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit before tax | 9,896,947 | 24,147,771 | 15,550,130 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Income tax expense | -317,188 | -612,884 | -1,159,439 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the period | 9,579,759 | 23,534,887 | 14,390,691 | -------------------------------------------------------------------------------- Information from the balance sheet (in Estonian kroons) -------------------------------------------------------------------------------- | | 31.12.2004 | 31.12.2005 | 31.12.2006 | -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- | Current assets | | | | -------------------------------------------------------------------------------- | Cash and bank accounts | 10,104,425 | 31,246,650 | 11,879,853 | -------------------------------------------------------------------------------- | Trade receivables | 13,001,594 | 13,531,032 | 21,616,816 | -------------------------------------------------------------------------------- | Other receivables | 1,863,205 | 5,378,000 | 5,040,000 | -------------------------------------------------------------------------------- | Deferred receivables and | 4,637 | 352,822 | 510,929 | | prepayments | | | | -------------------------------------------------------------------------------- | Inventories | 5,972,451 | 2,206,579 | 4,572,788 | -------------------------------------------------------------------------------- | Total current assets | 30,946,312 | 52,715,083 | 43,620,386 | -------------------------------------------------------------------------------- | Non-current assets | | | | -------------------------------------------------------------------------------- | Long-term investments | 5,312,979 | 4,712,673 | 10,095,775 | -------------------------------------------------------------------------------- | Investment property | 10,235,019 | 20,667,039 | 46,818,421 | -------------------------------------------------------------------------------- | Property, plant and equipment | 1,036,070 | 888,043 | 2,190,781 | -------------------------------------------------------------------------------- | Intangible assets | 0 | 0 | 109,319 | -------------------------------------------------------------------------------- | Total non-current assets | 16,584,068 | 26,267,755 | 59,214,296 | -------------------------------------------------------------------------------- | TOTAL ASSETS | 47,530,380 | 78,982,838 | 102,834,682 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | LIABILITIES AND EQUITY | | | | -------------------------------------------------------------------------------- | Current liabilities | | | | -------------------------------------------------------------------------------- | Borrowings | 30,295 | 0 | 0 | -------------------------------------------------------------------------------- | Prepayments of buyers for goods | 495,461 | 4,647,752 | 1,210,492 | | and services | | | | -------------------------------------------------------------------------------- | Trade payables | 13,327,251 | 10,876,604 | 12,471,539 | -------------------------------------------------------------------------------- | Tax liabilities | 747,774 | 588,295 | 661,638 | -------------------------------------------------------------------------------- | Deferred liabilities | 1,477,792 | 2,807,599 | 2,267,599 | -------------------------------------------------------------------------------- | Provisions | 2,348,998 | 9,425,692 | 10,586,090 | -------------------------------------------------------------------------------- | Total current liabilities | 18,427,571 | 28,345,942 | 27,197,358 | -------------------------------------------------------------------------------- | Non-current liabilities | | | | -------------------------------------------------------------------------------- | Interest-bearing loans and | 0 | 0 | 13,200,000 | | borrowings | | | | -------------------------------------------------------------------------------- | Trade payables | 0 | 0 | 87,337 | -------------------------------------------------------------------------------- | Provisions | 0 | 0 | 1,324,000 | -------------------------------------------------------------------------------- | Total non-current liabilities | 0 | 0 | 14,611,337 | -------------------------------------------------------------------------------- | TOTAL LIABILITIES | 18,427,571 | 28,345,942 | 41,808,695 | -------------------------------------------------------------------------------- | Equity | | | | -------------------------------------------------------------------------------- | Share capital | 1,000,400 | 1,000,400 | 1,000,400 | -------------------------------------------------------------------------------- | Statutory capital reserve | 100,040 | 100,040 | 100,040 | -------------------------------------------------------------------------------- | Retained earnings | 18,422,610 | 26,001,569 | 45,534,856 | -------------------------------------------------------------------------------- | Profit for the period | 9,579,759 | 23,534,887 | 14,390,691 | -------------------------------------------------------------------------------- | TOTAL EQUITY | 29,102,809 | 50,636,896 | 61,025,987 | -------------------------------------------------------------------------------- | TOTAL LIABILITIES AND EQUITY | 47,530,380 | 78,982,838 | 102,834,682 | -------------------------------------------------------------------------------- Information from the statement of cash flows (in Estonian kroons) -------------------------------------------------------------------------------- | | 2004 | 2005 | 2006 | -------------------------------------------------------------------------------- | Cash flows from operating | 3,280,065 | 37,437,734 | -2,427,526 | | activities | | | | -------------------------------------------------------------------------------- | Cash flows from investing | 1,344,961 | -14,264,237 | -26,137,161 | | activities | | | | -------------------------------------------------------------------------------- | Cash flows from financing | -2,057,673 | -2,031,095 | 9,198,400 | | activities | | | | -------------------------------------------------------------------------------- Ratios (in Estonian kroons) -------------------------------------------------------------------------------- | | 2004 | 2005 | 2006 | -------------------------------------------------------------------------------- | Dividend per share* | 200 | 400 | 500 | -------------------------------------------------------------------------------- | Basic earnings per share | 958 | 2,353 | 1,438 | -------------------------------------------------------------------------------- | Diluted earnings per share | 958 | 2,353 | 1,438 | -------------------------------------------------------------------------------- ______ * The figure is based on the year for which the dividend was paid, i.e. not the year when the dividend was paid. Since the end of the previous financial year there have been no significant changes in the business of Eston Ehitus. As of 19 October 2007 Eston Ehitus has taken only one loan, which is the loan in the amount of 13,200,000 Estonian kroons resulting from a loan agreement between Eston Ehitus and AS SEB Eesti Ühispank, dated 21 April 2006. The whole principal amount of the loan, the repayment date of which is 21 April 2010, remains outstanding as of 19 October 2007. The shares in Eston Ehitus belong to individuals, except for 300 shares in Eston Ehitus, which are located on the client accout of Cresco Väärtpaberite AS. The shareholders of Eston Ehitus which hold 5 per cent. or more of the votes represented by the shares in Eston Ehitus, are the following: Ivo Aulik (26.7893 per cent.), Arvi Allmann (12.3750 per cent.), Väinu Kopli (12.3750 per cent.), Kalle Lahe (9.3762 per cent.), Valdo Knaps (8.4466 per cent.) and Madis Priidik (5.4778 per cent.). The sole member of the management board (the manager) of Eston Ehitus is Eero Rändla. The members of the supervisory council of Eston Ehitus are Ivo Aulik, Valdo Knaps, Arvi Allmann, Urmas Veskimeister, Peep Sakk and Väinu Kopli. No court or arbitration proceedings are related to Eston Ehitus that could materially affect the economic activity of Eston Ehitus. There are no effective agreements between Eesti Ehitus and Eston Ehitus. Jaano Vink AS Eesti Ehitus +372 6400 450 e-mail: eestiehitus@eestiehitus.ee Ivo Aulik Aktsiaselts Eston Ehitus +372 44 20 280 e-mail: eston@eston.ee
AS Eesti Ehitus concluded an agreement for acquisition of 52 per cent. of the shares in Aktsiaselts Eston Ehitus
| Source: Nordecon