RESBUD SE MANAGEMENT REPORT
for the year 2021
1. STRUCTURE OF THE RESBUD SE GROUP
RESBUD SE
CONPOL Ltd. LLC ENERGOKOMPLEKT
(100%) (100%)
DELCRAFT EHITSU OR
(100 %)
UNIWERSIM Ltd.
(100 %)
As at 31 December 2021, the Company, as the majority shareholder, holds the following shares:
8000 shares in the share capital of CONPOL Ltd. with its registered office in Modlniczka, which
constitute 100% of shares in the share capital and entitle to 100% of votes at the general
meeting;
direct participation in the share capital of LLC Energokomplekt with its registered office in
Yekaterinburg, Russia, constituting 87.80% of shares in the share capital and entitling to
87.80% of votes in the shareholders' meeting, if the company also holds indirectly over Conpol
Ltd. 12.2% of the company's Energokomplekt Company, which gives 100% of control directly
and indirectly;
100 shares in the share capital of UNIWERSIM Ltd. with its registered office in Modlniczka,
which constitutes 100 % of shares in the share capital and entitles to 100 % of votes at the
general meeting;
indirectly over Conpol Ltd.
Tallinn, Estonia entitles to 100% of votes at the shareholders' meeting.
2. CHANGES IN THE COMPOSITION OF THE GROUP DURING THE FINANCIAL YEAR
As at 31.12.2020:
RESBUD SE
CONPOL Ltd. LLC ENERGOKOMPLEKT
(38.64 %) (4.10 %)
As at 31.12.2021:
RESBUD SE
CONPOL Ltd. LLC ENERGOKOMPLEKT
(100%) (100%)
DELCRAFT EHITSU OU
(100 %)
UNIWERSIM Ltd.
(100 %)
As at the reporting date, the Group consisted of 5 Companies. All subsidiaries are wholly owned
RESBUD SE. Diagram shows the structure of the Group as at the reporting date.
Changes in the Group's structure
In 2021 RESBUD SE
He obtained shares:
100% share in Universim Ltd. (Poland),
Increased shares:
by 61,36 % of the share in Conpol Ltd. (Poland)
by 95,9 % of that share in LLC Energokomplekt (Russia)
Main Shareholders of Resbud SE
Direct possession as of 31 December 2020:
Lp.
Name and surname / company
name
Number
Action
Number
Votes
% share of votes in the
total number of votes
1.
Alexey Petrov
102 660 820
102 660 820
43.39%
2.
DKW Poland
43 831 548
43 831 548
18,52%
3.
Olga Petrova
28 782 674
28 782 674
12,16%
Indirect possession on December 31, 2021:
Lp.
Name and surname/ company
name and
name of the direct holder
Number
Action
Number
Votes
% share of votes in the
total number of votes
1.
Alexey Petrov , directly and indirectly
over AP Energobau Ltd
and over EU LEX
107 793 239
107,793,239
45.55%
2.
over DKW Polska
43 831 548
43 831 548
18,52%
3.
Olga Petrova , directly and indirectly
3,0,596,324
30 596 324
12.93%
3. MATERIAL EVENTS AND CIRCUMSTANCES THAT HAVE OR MAY AFFECT THE FINANCIAL
POSITION OR FINANCIAL RESULTS OF THE GROUP FOR THE FINANCIAL PERIOD OR
SUBSEQUENT PERIODS.
The Company made a significant investment in February 2021 through the acquisition of shares
contributed as a non-cash contribution in exchange for a new share issue. Detailed information is
contained in points 1 and 2 above.
Another significant event is the sanctions imposed in March 2022 on the Russian Federation, where
Energokomplekt is based. Energokomplekt as an entity is not subject to sanctionand. The flow of cash
between companies is hindered due to the sanctions introduced. According to its statement,
Energokomplekt conducts undisturbed economic activity.
4. WHETHER THE OPERATING ACTIVITIES OF THE ACCOUNTING UNIT ARE SEASONAL OR
WHETHER ITS BUSINESS ACTIVITIES ARE CYCLICAL.
The issuer's activities are non-cyclical as an unconsolidated holding company. The activity of companies
in which the issuer holds shares takes place seasonally with a winter slowdown. Uniwersim Ltd.
produces mineral-asphalt mixtures, designed to make all structural layers of pavement, for roads of
traffic categories from KR1 to KR7. Conpol Ltd. operates on the Polish market, participating as a
contractor in investments in the field of cubature, engineering and road construction.
The physicality of LLC Energokomplekt is not subject to seasonal fluctuations. Both commercial and
service activities are carried out invariably throughout all months of the year. The company offers:
comprehensive supply of equipment and materials for the needs of contractors of all kinds of
infrastructure facilities;
logistics services related to the delivery of materials to any place in the world, customs
clearance or storage of products, as well as the acquisition of suppliers tailored to the
requirements and needs of the customer;
design and consulting services, including certification of new materials and equipment,
coordination of alternative technologies, amendments to design specifications and cost
estimates, obtaining positive conclusions necessary to start construction work.
5. MAIN AREAS OF ACTIVITY, PRODUCT AND SERVICE GROUPS. INFORMATION ON THE
EXISTENCE OF BRANCHES OF AN ACCOUNTING UNIT REGISTERED IN A FOREIGN STATE.
The activities are:
- construction activities,
- activity in the energy and construction industry
The above-mentioned activity is carried out indirectly through shares in other companies (holding
activities).
Resbud SE has one foreign branch registered in Poland. The full name of the branch is: Resbud SE
(European company) Branch in Poland. The branch was registered by the District Court for Krakow -
entrepreneurs, under the KRS number 0000813367. Branch address: Zielna 20, 32 085 Modlniczka.
Identification number: 384865290. In 2021 year, the branch in Poland did not conduct any sales that
may occur in the following years.
The Company has no other branches, except for the branch indicated above.
6. GENERAL (MACROECONOMIC) DEVELOPMENT OF FINANCIAL RESULTS.
In 2021, the company's macroeconomic environment was stable. Due to the change in the strategy of
transforming the company into a holding company, this environment did not affect the company's
results. The macroeconomic environment of the companies whose shares were acquired by the issuer
was also stable. The situation changed after February 24, 2022, i.e. the start of hostilities by Russia in
Ukraine. As a consequence, the countries of the European Union and not only began to introduce
sanctions against the Russian Federation, which disrupted the functioning of many world economies,
including Poland, Estonia and Russia.
7. DIVIDEND POLICY OF THE CAPITAL GROUP.
In 2021, a dividend of 29,898,750 rubles was paid by LLC Energokomplekt. Of the above amount,
Conpol Ltd. received: 8.5%, Resbud SE: 87.8%, Delkraft OU: 3.7%. The other companies in the group
did not pay dividends.
After the end of the financial year 2021, the Management Board of Resbud SE intends to introduce a
dividend policy for RESBUD SE. In the opinion of the Management Board, if the group achieves results
ensuring that investment needs are met, part of the profit generated by the company should be paidto
the shareholders of RESBUD SE.
8. SIGNIFICANT ENVIRONMENTAL AND SOCIAL IMPACTS RESULTING FROM THE GROUP'S
ACTIVITIES .
The Issuer, after the change of strategy made in 2019, operates as a holding company. The main activity
of the company is the exercise of rights from its shares and participation in the management of other
enterprises. The issuer's other activities shall be limited to management and administrative activities
carried out for its own needs. The issuer's activity is office in nature, which means that it does not have
significant environmental or social effects.
9. FINANCIAL INSTRUMENTS FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
AND RISKS RELATED TO CHANGES IN EXCHANGE RATES, INTEREST RATES AND EXCHANGE
RATES THAT OCCURRED DURING THE FINANCIAL YEAR OR DURING THE REPORTING PERIOD.
Information on this subject is included in Note No. 30 to the Consolidated Financial Statements for 2021:
"Fair values and risk management".
10. THE MAIN FINANCIAL INDICATORS FOR THE FINANCIAL YEAR AND THE PREVIOUS
FINANCIAL YEAR AND THE METHODS FOR CALCULATING THE INDICATORS.
PROFITABILITY RATIOS:
2021
2020
Net profitability
-0,76 %
N/a
Return on capital ROE
-2.67 %
-18.23%
Return on ROA assets
-1.17 %
-14.52%
LIQUIDITY RATIOS:
2021
2020
Cash ratio (I)
0.08 m
0.006
Fast ratio (II)
0,89
0.15 m
Current Ratio (III)
0,95
0.15 m
Debt coverage ratio
0,11
-0.3 6
DEBT RATIOS:
2021
2020
Share of equity in financial assets %
43,46 %
68,58 %
Share of long-term liabilities in liabilities %
2,26 %
0,0 %
Debt ratio
0,56 %
31,42 %
Methods for calculating the coefficients:
Net profitability: (Net profit/loss / Revenue) * 100%.
Return on equity - ROE: net profit/loss after tax / arithmetic mean of equity at the beginning and end of the year.
Return on assets - ROA: net profit or loss / arithmetic mean of assets at the beginning and end of a given year.
Cash Ratio (I) - Cash Ratio: Cash and Cash Equivalents/ Current Liabilities.
Quick ratio (II) - quick ratio: ( current assets - inventories) / current liabilities.
Current indicator (III) - current ratio : current assets / current liabilities.
Debt coverage ratio: Cash flow from operating activities (CFO) / Total liabilities.
Share of equity in financial assets: total equity / total assets * 100%
Share of long-term liabilities in liabilities: long-term liabilities / total liabilities *100%
Debt ratio: (long-term liabilities + current liabilities0) / total assets.
11. IF AN ACCOUNTING ENTITY HAS ACQUIRED OR ACCEPTED AS COLLATERAL ITS OWN
SHARES DURING THE FINANCIAL YEAR, THE FOLLOWING ITEMS WHICH HAVE BEEN
ACQUIRED OR ACCEPTED AS COLLATERAL SHALL BE PRESENTED IN THE MANAGEMENT
REPORT AS TRANSFERRED RATHER THAN TRANSFERRED.
In 2021 and in the period until the date of submission of the financial statements for 2021, the issuer
did not hold its own shares.
12. THE STRUCTURE OF THE SHARE CAPITAL, INCLUDING SECURITIES, IN WHICH TRADING
IN REGULATED SECURITIES OF THE CONTRACTING STATES IS NOT PERMITTED, AS WELL AS,
AS FAR AS POSSIBLE, DATA ON THE DIFFERENT CLASSES OF SHARES, RIGHTS AND
OBLIGATIONS ATTACHING TO EACH CLASS OF SECURITIES AND THEIR PERCENTAGE OF THE
COMPANY'S SHARE CAPITAL.
This information is presented in Notach to the Consolidated Financial Statements for 2021, i.e. Note
No. 10 "Earnings per share", Note No. 24 "Capital and reserves" and Note No. 25 "Capital management".
13. AUTHORIZATION OF MEMBERS OF THE MANAGEMENT BOARD OF THE COMPANY,
INCLUDING AUTHORIZATION TO ISSUE AND REPURCHASE SHARES.
In 2021, the Management Board of the Company was not entitled to issue and repurchase shares. In
2021, the company issued new shares, but the issue was made on the basis of the decision of the
General Meeting of September 7, 2020. Details of the share issue were provided by the company in
current reports No. 29/2020, 31/2020, 32/2020, 3/2021 and 4/2021. The issuance process ended on
March 9, 2021.
CORPORATE GOVERNANCE
I. Indication of the corporate policy set that RESBUD SE is subject to and the place where the text of
the policy collection is publicly available.
The Issuer, as a Company listed on the Warsaw Stock Exchange, on August 9, 2021 published a report
on the state of application of the Good Practices 2021. The RESBUD SE report on the state of application
of the Good Practices 2021 can be found on the corporate https://www.resbud.ee/lad website.
The new collection was developed by the Warsaw Stock Exchange II and adopted on 1 July 2021 by
Resolution No. 13/1834/2021 of the WSE Supervisory Board of 29 March 2021. The set of corporate
governance principles and related rules of conduct have a significant impact on shaping the relations
of listed companies with their market environment. The collection is available for public inspection on
the WSE website at https://www.gpw.pl/dobre-praktyki2021.
The Issuer does not apply other than the following principles of good corporate governance practices,
including those mentioned above, in addition to the requirements set out in Estonian law.
II. Indication of how RESBUD SE has implemented and applies corporate governance principles.
RESBUD SE applies the principles of corporate governance contained in the best practices of a company
listed on the Warsaw Stock Exchange S.A. 2021 from the date of entry into force of these regulations.
On August 8, 2021, the EIB report No. 1/2021 contained information on the non-application of detailed
rules indicated in the set of corporate governance principles referred to in the previous sentence.
III. An indication of the extent to which the issuer has not applied the corporate rules, together
with an indication of those rules and an explanation of the reasons for the withdrawal.
Information on the state of application by the Company of the recommendations and principles
contained in the good practices of a company listed on the Warsaw Stock Exchange 2021.
In accordance with the current state of compliance with the Good Practices, the Company does not
apply 18 detailed rules: 1.3.1., 1.4., 1.4.1., 1.4.2., 1.5., 1.6., 2.1., 2.2., 2.3., 2.11.1., 2.11.2., 2.11.3.,
2.11.4., 2.11.5., 2.11.6., 3.9., 4.3., 4.11.
1. DISCLOSURE POLICY, INVESTOR COMMUNICATION
In the interest of all market participants and their own interests, listed companies shall ensure high-
quality communication with investors and shall have a transparent and fair disclosure policy.
1.1. Companies maintain efficient communication with capital market participants and reliably inform
about matters that concern them. For this purpose, companies use a variety of communication tools
and forms, including in particular a corporate website where they publish all information relevant to
investors.
This principle is applied.
1.2. Companies shall make available their financial results as summarised in periodic reports as soon
as possible after the end of each reporting period; where this is not feasible for compelling reasons,
undertakings shall publish at least preliminary financial estimates as soon as possible.
This principle is applied.
1.3. Companies incorporate ESG factors into their business strategy, including in particular:
1.3.1. environmental factors, including measures and risks related to climate change and sustainable
development;
This rule is not applied.
Comments of the Company: The company's activities do not generate a high burden on the
environment, as the company is a holding company. The main activity of the company is of an office
nature.
1.3.2. social and occupational factors, including m.in. actions taken and planned to ensure equal
treatment of men and women, decent working conditions, respect for workers' rights, dialogue with
local communities, customer relations.
This principle is applied.
1.4. To ensure the quality of communication with stakeholders, as part of the business strategy,
companies publish on their website information regarding the framework of the strategy, measurable
goals , including in particular long-term goals, planned activities and their status, determined by means,
both financial and non-financial. ESG information on the strategy should m.in:
This rule is not applied.
Company Comments: The Company publishes the information required by law on its website.
Information about the company's strategy and goals is provided mainly in periodic reports. The
Company does not publish financial or non-financial funds.
1.4.1. explain how the decision-making processes of the company and its group members take into
account climate change, including the resulting risks;
This rule is not applied.
Company Comments: Due to the company's marginal impact on climate change , the company does
not address these issues in its decision-making processes.
1.4.2. provide an equal pay index for employees, defined as the percentage difference between the
average monthly salary (including bonuses, awards and other benefits) of women and men in the last
year, and provide information on the actions taken to close any pay gap, including a presentation of
the associated risks and the time horizon of the equality objective.
This rule is not applied.
Comments of the Company: Due to the fact that as at the date of submitting this statement there was
no application of the principles of respect for social and employee issues formalized, the Company does
not publish additional information in the scope covered by this point.
1.5. Companies disclose at least once a year the amounts spent by the company and its group to
support culture, sport, charities, media, social organizations, trade unions, etc. If the company or its
group covers such expenses in the reporting year, the disclosure provides a list of such expenses.
This rule is not applied.
Comments of the Company: The Company does not incur such expenses.
1.6. Companies participating in the WIG20, mWIG40 or sWIG80 index take place quarterly, and other
companies hold meetings with investors at least once a year, to which shareholders, analysts, industry
experts and the media are invited in particular. At such meetings, the company's management board
presents and comments on the strategy and its implementation, the financial results of the company
and its group and key events. influencing the activities of the company and its group, their results and
prospects. At such meetings, the company's management publicly provides answers and explanations
to the questions asked.
This rule is not applied.
Notes of the Company: The Company does not belong to any of the indicated indices. In addition, there
are no meetings for investors, analysts and shareholders. All information is provided by the company
via electronic communication.
1.7. If the investor requests any information about the company, the company will respond
immediately, and in any case no later than within 14 days.
This principle is applied.
2. MANAGEMENT BOARD, SUPERVISORY BOARD
In order to ensure the highest standards of responsibility and effective performance of the
Management Board and the Supervisory Board of the company, only persons with appropriate
competences, skills and experience are appointed to the management staff. management board and
supervisory board. Members of the Management Board act in the interest of the company and are
responsible for its activities. The Management Board is m.in responsible for the company's leadership,
commitment to setting and implementing its strategic goals, and ensuring the efficiency and safety of
the company. Members of the Supervisory Board performing their function and within the scope of
their duties in the Supervisory Board are guided by an independent opinion and judgment, including
when making decisions and acting in the interest of the company.
The Supervisory Board operates in the spirit of debate and analyzes the position of the company in the
context of the sector and the market on the basis of information provided by the Company's
Management Board and through the company's internal systems and functions and obtained from
external sources, using the results of its committees. In particular, the Supervisory Board gives opinions
on the company's strategy, verifies the work of the Management Board in pursuit of specific strategic
goals and monitors the company's results.
2.1. Companies should have a diversity policy applicable to the management and supervisory boards,
approved by the supervisory board and the general meeting respectively. The diversity policy shall set
out the objectives and criteria of diversity, including gender, education, expertise, age, professional
experience, and shall set target dates and monitoring systems for such purposes. With regard to the
gender diversity of corporate bodies, the share of the minority group in each body should be at least
30%.
This rule is not applied.
Notes of the Company: Key personnel decisions in relation to the Management Board of the Company
and its key managers are made by the General Meeting and the Supervisory Board. The Company uses
the competence key in the selection of members of the bodies.
2.2. Decisions on the selection of members of the management or supervisory board of companies
should ensure that the composition of those bodies is differentiated by appointing persons who ensure
diversity, m.in in order to achieve the target minimum share of a minority group of at least 30% in
accordance with the objectives of the established diversity policy referred to in Principle 2.1.
This rule is not applied.
Company's comments: The Company uses a competence key when selecting the composition of organs.
The current composition of the company's bodies meets the indicator expressed in this principle.
2.3. At least two members of the supervisory board meet the independence criteria referred to in the
Act of 11 May 2017. about statutory auditors, audit firms and public supervision, and does not have
factual and material information relations with each shareholder who holds at least 5% of the total
number of votes in the company.
This rule is not applied.
Company's comments: The decision to elect members of the Supervisory Board is the responsibility of
the General Meeting of Shareholders. Shareholders, guided by competence and trust in individual
candidates, decide on the composition of the Supervisory Board. The Company may, depending on the
decision of the General Meeting, periodically meet or not meet this criterion depending on the selected
composition of the Management Board. Currently, the Supervisory Board does not meet the criteria of
independence, because only one member of the Supervisory Board is independent, and the assessment
of the resulting risks falls within the competence of the General Meeting.
2.4. The Supervisory Board and the Management Board shall vote in an open vote, unless otherwise
provided for by law.
This principle is applied.
2.5. Members of the supervisory board and members of the management board who vote against
the resolution may be recorded in the minutes.
This principle is applied.
2.6. Functions in the company's management board are the main area of professional activity of
management board members. Members of the management board should not engage in additional
professional activities if the time spent on such activities prevents them from functioning properly in
the company.
This principle is applied.
2.7. Members of the company's board of directors may sit on the corporate bodies of companies other than
members of its capital group subject to approval by the supervisory board.
This principle is applied.
2.8. Members of supervisory boards should be able to devote the time necessary to
the performance of their duties.
This principle is applied.
2.9. The Chairman of the Supervisory Board should not combine this function with the function of the
Chairman of the Audit Committee of the Supervisory Board.
This principle is applied.
2.10. Companies allocate the administrative and financial resources necessary to ensure the smooth
functioning of the supervisory board in a manner adequate to their size and financial situation.
This principle is applied.
2.11. In addition to the obligations laid down in the regulations, the supervisory board shall draw up
and submit an annual report to the annual general meeting once a year. That report shall contain at
least the following elements:
2.11.1. information on members of the supervisory board and its committees, including the
identification of those members of the supervisory board who meet the independence criteria referred
to in the Act of 11 May 2017 on statutory auditors, audit firms and public supervision and on these
supervisory boards members who do not have a factual and material relationship with any shareholder
who holds at least 5% of the total number of votes in the company, and information about the
members of the supervisory board in the context of diversity;
This rule is not applied.
Comments of the Company: The Company does not publish and does not submit to the General
Meeting a report on the activities of the Supervisory Board in accordance with the applicable Estonian
law.
2.11.2. a summary of the activities of the supervisory board and its committees;
This rule is not applied.
Company Comments: The explanations in this matter are the same as those given in 2.11.1.
2.11.3. an assessment of the company's situation on a consolidated basis, including an assessment of
the internal control, risk management and compliance systems and the internal audit function, as well
as information on the measures taken by the supervisory board to carry out such an assessment;
whereas such evaluation should cover all relevant controls, in particular reporting and operational
controls;
This rule is not applied.
Company Comments: The explanations in this matter are the same as those given in 2.11.1
2.11.4. an assessment of the company's compliance with the principles of corporate governance and
the manner of fulfilling information obligations regarding compliance with the principles of corporate
governance set out in the Exchange Regulations and regulations regarding current and periodic reports
published by issuers of securities and information on actions taken by the supervisory board to make
such an assessment;
This rule is not applied.
Company Comments: The explanations in this matter are the same as those given in 2.11.1
2.11.5. an assessment of the reasonableness of the expenditure referred to in Rule 1.5;
This rule is not applied.
Company Comments: The explanations in this matter are the same as those given in 2.11.1
2.11.6. information on the degree of implementation of the diversity policy applicable to the
management board and the supervisory board, including the achievement of the objectives referred
to in Principle 2.1.
This rule is not applied.
Company Comments: The explanations in this matter are the same as those given in 2.11.1
3. INTERNAL SYSTEMS AND FUNCTIONS
Legal systems and internal functions are an indispensable tool for supervising a company.
The systems cover the company and all areas of its group's activity that have a significant impact on
the company's position.
3.1. Listed companies maintain effective internal control, risk management and compliance systems
and an efficient internal audit function adequate to the size of the company and the type and scale of
its activity; the management board is responsible for their functioning.
This principle is applied.
3.2. The organisation of companies shall comprise the units responsible for the tasks of particular
systems and functions, unless this is not justified by the size of the undertaking or the nature of its
activities. .
This principle is applied.
Notes of the Company: Due to the size and activity of the Company, as at the date of submission, no
units responsible for the tasks of individual systems or functions have been separated.
3.3. Companies participating in the WIG20, mWIG40 or sWIG80 index appoint an internal auditor as
the head of the internal audit function in accordance with generally accepted international standards
of professional practice internal audit. In other companies that do not appoint an internal auditor who
meets such requirements, the audit committee (or the supervisory board, if it performs the functions
of an audit committee) assesses annually whether such a person should be appointed.
This principle is applied.
Company's comments: In the company, the Supervisory Board acts as an audit committee.
3.4. The remuneration of those responsible for risk and compliance management and the head of
internal audit should depend on the performance of the delegated tasks, and not on the short-term
performance of the company.
This principle is applied.
3.5. The persons responsible for risk and compliance management report directly to the President or
another member of the Board of Directors.
This principle is applied.
3.6. The head of internal audit is subject organizationally to the President of the Management Board
and functionally to the Chairman of the Audit Committee or the Chairman of the Supervisory Board if
the supervisory board performs the functions of the audit committee.
This principle is applied.
3.7. Rules 3.4-3.6 also apply to members of the company's capital group who are relevant to its group.
This principle is applied.
3.8. The person responsible for internal audit or the board of directors, if such function is not
performed separately in the company, shall at least once a year submit to the supervisory board their
assessment of the effectiveness of the systems and functions referred to in Rule 3.1 and shall draw up
a report accordingly.
This principle is applied.
3.9. The Supervisory Board monitors the effectiveness of the systems and functions referred to in principle
3.1 m.in on the basis of reports provided periodically by the persons responsible for the functions and
management of the company, and annually assess the effectiveness of such systems and operate in
accordance with Principle 2.11.3. Where a company has an audit committee, the audit committee
shall monitor the performance of the systems and functions referred to in Rule 3.1, which shall not,
however, exempt the supervisory board from annually assessing the effectiveness of such systems and
functions.
This rule is not applied.
Comments of the Company: The Company does not publish and does not submit to the General
Meeting a report on the activities of the Supervisory Board in accordance with the applicable Estonian
law.
3.10. Companies included in the WIG20, mWIG40 or sWIG80 index have an internal audit function
reviewed at least once every five years by an independent auditor appointed with the participation of
an audit committee.
The rule does not apply.
Company Notes: The Company does not belong to any of these indices.
4. GENERAL MEETING, RELATIONS WITH SHAREHOLDERS
The Management Board and the Supervisory Board of listed companies should encourage shareholders
to engage in the affairs of the company, in particular through active participation in the general
meeting, in person or through a proxy server. The general meeting should respect the rights of all
shareholders and ensure that the resolutions adopted do not prejudice the legitimate interests of the
various groups of shareholders. Shareholders attending the general meeting shall exercise their rights
in accordance with the principle of good conduct. Participants in the general meeting should come
prepared for the general meeting.
4.1. Companies should allow their shareholders to participate in the general meeting by means of
electronic communication (e-meeting) if this is justified by the expectations of the shareholders as
communicated the company, provided that the company is able to provide the technical infrastructure
necessary to hold such a general meeting.
This principle is applied.
4.2. Companies shall determine the place, date and form of the general meeting so as to allow as
many shareholders as possible to participate. To this end, companies shall endeavour to ensure that
the cancellation of the general meeting, the rescheduling of the general meeting or the interruption of
the meeting take place only when justified. and shall not prevent or restrict the exercise by
shareholders of their rights to participate in the general meeting.
This principle is applied.
4.3. Companies provide public broadcast of the general meeting in real life.
This rule is not applied.
Notes of the Company: According to the Company, the transmission costs of the General Meeting
are too high and none of the shareholders expressed interest in this type of message.
4.4. The presence of media representatives is allowed at general meetings.
This principle is applied.
4.5. If the Management Board becomes aware of the convening of a general meeting pursuant to
4 of the Commercial Companies Code, the Management Board immediately takes the
actions it is obliged to take in order to organize and conduct the General Meeting. The above also
applies in the case of convening a general meeting under the authority of the registry court in
This principle is applied.
4.6. Assistance to shareholders participating in the general meeting to vote on resolutions with
appropriate understanding, draft resolutions of the general meeting on matters and decisions other
than requests for procurement should include a justification, unless it results from the documentation
submitted to the general meeting. If the matter is placed on the agenda of the general meeting at the
request of a shareholder or shareholders, the board of directors shall request the justification for the
proposed resolution, unless it has previously been presented by such shareholder or shareholders.
This principle is applied.
4.7. The Supervisory Board gives its opinion on draft resolutions introduced by the Management Board
to the agenda of the General Meeting.
This principle is applied.
4.8. Draft resolutions of the general meeting on matters included in the agenda of the general meeting
should be submitted by shareholders no later than three days before the general meeting.
This principle is applied.
4.9. If the general meeting is to appoint members of the supervisory board or members of the
supervisory board for a new term of office:
4.9.1. candidates for the position of members of the supervisory board should be notified with the
necessary notice to the shareholders present at the general meeting to take an informed decision, and
in any case no later than three days before the general meeting; the names of the candidates and all
related documents should be published immediately on the company's website;
This principle is applied.
4.9.2. candidates for members of the supervisory board submit a statement on meeting the
requirements for members of the audit committee, referred to in the Act of 11 May 2017 on statutory
auditors, audit firms and on society Supervision and maintenance of real and significant relations with
each shareholder who holds at least 5% of the total number of votes in the company.
This principle is applied.
4.10. The exercise of shareholders' rights or the way in which they exercise their rights must not
impede the proper functioning of the company's management bodies.
This principle is applied.
4.11. Members of the management board and members of the supervisory board participate in the
general meeting at the place of the meeting or via two-way electronic communication in real time, as
necessary to comment on matters discussed by the general meeting and to answer questions asked at
the general meeting. The Management Board shall present to the participants of the annual general
meeting the financial results of the company and other relevant information, including non-financial
information, contained in the financial statements for approval by the general meeting. The
Management Board presents the key events of the last financial year, compares the presented data
with previous years and presents the degree of implementation of plans for the previous year.
This rule is not applied.
Company Comments: The Company will provide all documents related to the financial statements in a
timely manner. The Board of Directors participates in the general meeting, but does not present the
results and other data that were presented in the documents. In the event of questions from
shareholders of the Management Board, it shall provide appropriate explanations.
4.12. Resolutions of the general meeting concerning the issue of shares with pre-emptive rights should
specify the issue price or price-setting mechanism or empower the competent body setting the price
before the date of registration of the subscription right within the timeframe necessary for investors
to take decisions.
This principle is applied.
4.13. Resolutions on a new issue of shares, excluding pre-emptive rights, may be adopted which grant
pre-emptive rights to new issue shares to selected shareholders or other entities subject to at least the
following three criteria:
a) the company has a rational, economically justifiable need to raise capital urgently or the issue of
shares involves rational, economically justifiable transactions, m.in such as a merger with or acquisition
of another company or the acquisition of shares under an incentive scheme established by the
company;
b) Whereas persons to whom a pre-emptive right has been granted are to be selected in accordance with
objective general criteria;
c) the purchase price of the shares remains in a reasonable relation to the current share price of the
company or is to be determined as part of the book-building of demand on the market.
This principle is applied.
Notes of the Company: The Company indicates that the final decision in this respect is made by the
General Meeting.
4.14. Companies should seek to distribute their profits through the payment of dividends. Companies
may retain all of their profits subject to one of the following criteria:
a) the profits are minimal and therefore the dividend would be immaterial in relation to the value of
the shares;
b) the company reports uncovered losses from previous years and profits are used to reduce such
losses;
c) the company can demonstrate that the investment of profits will bring measurable benefits to
shareholders;
d) the company generates insufficient cash flow to pay dividends;
e) the payment of dividends would significantly increase the risk associated with covenants arising from the
company's binding obligations , credit instruments or the terms of the bond issue;
f) retention of the company's profits in accordance with the recommendations of the supervisory authority
the company due to its business activity.
This principle is applied.
5. CONFLICT OF INTEREST, RELATED PARTY TRANSACTIONS
For the purposes of this Section, 'related party' is defined within the meaning of international
accounting standards as approved by Regulation (EU) No 1606/2002 of the European Parliament and
of the Council of 19 July 2002 on the application of international accounting standards. Companies
and their groups should have transparent procedures in place to manage conflicts of interest and
related party transactions where a conflict of interest may arise. The procedures should provide for
ways of identifying, disclosing such cases and how to deal with them.
Members of the Management Board and the Supervisory Board should refrain from professional or
other activities that could give rise to a conflict of interest or adversely affect their reputation as a
member of the legal body, and in the event of a conflict of interest, they should disclose it immediately.
5.1. The members of the administrative board and the members of the supervisory board shall notify
the management or supervisory board accordingly of any conflict of interest that has arisen or may
arise and refrain from discussing it that may lead to such a conflict of interest in their case.
This principle is applied.
5.2. If a member of the management board or a member of the supervisory board finds that the
decision of the management board or the supervisory board, respectively, is contrary to the interest
of the company, he should request that the minutes of the management board or meeting of the
supervisory board show his dissenting opinion.
This principle is applied.
5.3. No shareholder should have priority over other shareholders in related party transactions. The
above also applies to transactions concluded by the company's shareholders with members of the
company's capital group.
This principle is applied.
5.4. Companies may repurchase their own shares only in a procedure that respects the rights of all
shareholders.
This principle is applied.
5.5. Ifa transaction concluded by a company with a related party requires the consent of the
supervisory board, before giving its consent, the supervisory board assesses whether to seek the prior
opinion of a third party to the supervisory board, which may provide a valuation of the transaction and
review its economic effects.
This principle is applied.
5.6. If a transaction with a related party requires the approval of the general meeting, the
supervisory board shall issue an opinion on the legitimacy of such a transaction. In such a case, the
supervisory board shall assess whether to seek a prior opinion from a third party referred to in Rule
5.5.
This principle is applied.
5.7. Where a decision on a material transaction of a company with a related party is taken by the
general meeting, the company should make available to all shareholders the information necessary to
assess the impact of the transaction on the company's interest before taking a decision, including the
opinion of the supervisory board referred to in Rule 5.6.
This principle is applied.
6. REMUNERATION
The Companies and the Group protect the stability of their management teams m.in through
transparent, fair, consistent and non-discriminatory remuneration conditions, including equal pay for
women and men. The remuneration policies of companies for members of corporate bodies and key
managers should in particular specify the form, structure and manner in which remuneration is
determined and paid. .
6.1. The remuneration of board members and of supervisory board members and key managers
should be sufficient to attract, retain and motivate those with the skills necessary to:
proper management and supervision of the company. The level of remuneration should be adequate
to the tasks and responsibilities delegated to natural persons and the resulting accountability.
This principle is applied.
6.2. Incentive systems should be constructed in the manner necessary m.in to link the level of
remuneration of members of the company's management board and key managers with the actual
long-term situation. a company measured by financial and non-financial performance and long-term
shareholder value creation, sustainability and stability of the company.
This principle is applied.
6.3. Where company incentive schemes include a share option scheme for managers, the
implementation of the share option scheme should depend on the performance of the beneficiaries
over a period of at least three years, predetermined, realistic financial and non-financial objectives and
sustainability objectives adequate to the company, as well as the share price or exercise of the option,
the price to the beneficiaries shall not differ from the value of the shares at the time of approval of
such a scheme.
This principle is applied.
6.4. Since the supervisory board performs its duties on a continuous basis, the remuneration of the
members of the supervisory board cannot depend on the number of meetings held. The remuneration
of the members of the committees, in particular the audit committee, should take into account the
additional workload of the committee.
This principle is applied.
6.5. The level of remuneration of supervisory board members should not depend on the remuneration of
the company short-term results.
This principle is applied.
7. A DESCRIPTION OF THE MANAGEMENT AND SUPERVISORY BODIES, THE COMPOSITION
OF THEIR COMMITTEES AND THE ORGANISATION OF THEIR WORK.
7.1. The Executive Body of the company is the Management Board. According to the articles of
association, the company's management board may consist of 1 to 4 members. In 2021, the
Management Board consisted of: 1 person from January 1, 2021 to April 25, 2021 Mr.
Gerard Podolski and 2 people from April 24, 2021
This body directs the activities of the company, represents the company externally. Members of the
Management Board are elected by the Supervisory Board, which also decides on the remuneration of
Management Board members. The board did not have any committees or responsibilities between the
members, given the size of the company. Each member of the Management Board of the company
may represent the company independently in all legal transactions, unless the resolution of the
Supervisory Board is specified otherwise. If the Management Board of a company consists of more
than two (2) members, the Management Board shall appoint the President of the Management Board.
Meetings of the Management Board shall have a quorum if it covers more than half of the members
of the Management Board. Decisions of the Management Board shall be adopted by a simple majority
of votes. Each member of the Management Board shall have one vote. The vote of the President of
the Management Board is decisive in the event of an equal distribution of votes. A member of the
Management Board may resign at any time. The resignation shall be submitted to the Supervisory
Board.
Detailed rules of functioning of the Management Board are regulated by generally applicable Estonian
law and the Company's Articles of Association.
7.2. The Supervisory Board is the supervisory body of the company. The scope of her duties includes
planning the company's activities, assistance in organizing the company's management and
supervision over management activities. From the date of transfer of the company to Estonia, the
Supervisory Board may consist of 3 to 7 members. This body is appointed by the general meeting of
the company. The term of office of the members of the supervisory board is 5 years.
Meetings of the Supervisory Board shall be held where appropriate, but not less than once in a period
of three months. The notice of convening a meeting of the Supervisory Board is sent at least seven
days before the date of the planned meeting and contains the agenda proposed by the Chairman of
the Supervisory Board. A meeting of the Supervisory Board has a quorum if it covers more than half of
the members of the Supervisory Board. Resolutions of the Supervisory Board are adopted by a simple
majority of votes. The vote of the Chairman of the Supervisory Board is decisive in the case of equal
distribution. The Supervisory Board has the right to adopt resolutions without convening a meeting, if
all members of the Supervisory Board agree to it.
The procedure for adopting resolutions is as follows: The Chairman of the Supervisory Board sends a
draft resolution to all members of the Supervisory Board, setting a deadline within which a member of
the Supervisory Board must present a written position. If a member of the Supervisory Board does
not submit a resolution of his vote for or against within the prescribed period, he shall be deemed to
have voted against the resolution. A resolution is adopted if more than half of the members of the
Supervisory Board voted for the resolution. Approval by the company's management board of the
company's budget and risk management principles is required for approval by the Supervisory Board.
As in the case of: the acquisition or disposal by a company of any asset the value of which exceeds EUR
100 000 in one or more related transactions; agreeing to the terms of operations with members of the
Management Board and deciding to conclude a legal dispute with a member of the Management Board
and appointing a person authorized to represent the company in such a dispute, consent to any type
of transaction the value of which exceeds EUR 100 000 in one or more related transactions; consent
to borrowing or granting or other debt obligations of the company or the acquisition by the company
of liabilities the value of which exceeds EUR 100 000 in one or more related transactions; establishment
and closure of foreign subsidiaries, representative offices or other entities of the company; the
acquisition or disposal of any type of business or the termination of activities or the conclusion of such
transactions, which may result in future acquisitions or disposals of business or business activities, the
creation, acquisition or merger with other undertakings or the disposal of subsidiaries, or the transfer,
sale or imposition in any other way of parts and associations of subsidiaries or the termination of the
activities of subsidiaries.
Detailed rules for the functioning of the Supervisory Board are set out in the Estonian Commercial Code
and the Company's Articles of Association .
8. A DESCRIPTION OF THE MAIN FEATURES OF THE INTERNAL AUDIT AND RISK
MANAGEMENT SYSTEMS IN RELATION TO THE PROCESS OF PREPARING THE ANNUAL
ACCONUTS.
Due to the simplified structure and relatively limited number of financial risks, the issuer's
management board has not developed and introduced a written procedure for internal control and
risk management in the preparation of financial statements, but the issuer approaches the issue of
financial reporting with the utmost care.
The Management Board of the company is responsible for the company's internal control system and
its effectiveness in the correctness of preparing financial statements and periodic reports. Financial
and periodic statements are prepared on the basis of financial data from the financial and accounting
system , if they are recorded in accordance with the regulations, with the principles of accounting
policy adopted in accordance with the Accounting Act.
Verification of the correctness of the periodic accounts shall be carried out by independent auditors
for the purposes of the annual financial audits and each half-yearly review of the accounts.
Financial statements are prepared by professional entities. In 2021, the issuer used the accounting
services of the accounting office "BLOK"
basis of an outsourcing agreement to the issuer. Using the services of a specialized office, the
management board receives ongoing external advice on consulting any problems related to the correct
preparation of mandatory financial statements, including quarterly, half-yearly and annual reports and
tax issues.
9. AN INDICATION OF THE OWNERS OF THR SHARES WHO GRANT CERTAIN AUDIT POWERS
AND A DESCRIPTION OF THOSE POWERS.
All shares of the company are ordinary shares. No series of shares confers on shareholders special
powers to conduct an audit. The articles of association also do not confer on the shareholders any
powers, in particular powers to audit the company.
10. ANY RESTRICTIONS ON THE TRANSFER OF THE ISSUER'S SHARES AND THE EXERCISE OF
VOTING RIGHTS.
According to the best knowledge of the management board of RESBUD SE, in 2021 there were no
restrictions on the transfer of shares or the exercise of voting rights from the issuer's shares. The
information held by the Management Board shows that all shareholders holding shares had the right
to vote at the general meeting of the company.
11. PROVISIONS REGARDING THE AMENDMENT OF THE COMPANY'S ARTICLES OF ASSOCIATION.
According to the Estonian Commercial Code, a resolution of the general meeting is required by a
majority of 2/3 of votes to amend the articles of association. The company's articles of association do
not provide for further requirements for the adoption of such a resolution. Also in accordance with
Commercial Register is required to change the company's speech.
The current Articles of Association can be found on the company's website www.resbud.ee
A copy of the association's Statutu can also be obtained from the Estonian Commercial Register at
https:// ariregister.rik.ee.
12. AUTHORIZATION OF MANAGEMENT BOARD MEMBERS, INCLUDING AUTHIRIZATION,
TO INCREASE CAPITAL AND ISSUE SHARES.
The Management Board did not have any special rights in 2021, including the right to increase the
capital and issue shares.
13. DIVERSITY POLICY.
The company has not introduced a diversity policy. The reason for this is the minimum number of
employees employed. In the company's body, diversity issues are clarified in the corporate governance
report.
14. EVENTS AFTER THE BALANCE SHEET DATE.
On May 23, 2022, the Extraordinary General Meeting of Shareholders of RESBUD SE was held, at which
resolutions were adopted on the amendment of the Company's Articles of Association and the issue
of bonus shares.
Resolution No. 1 gave a new wording to points 2.1 and 2.4 of the Company's Articles of Association,
therefore the minimum amount of the Company's share capital is currently EUR 7,975,000, and the
maximum amount of share capital is EUR 35 000 000. In addition, the minimum number of shares of
the Company without par value was set at 72 500 000 shares, and the maximum number of shares of
the Company without par value was set at 320 000 000 shares.
In addition, by resolution No. 3 of the Extraordinary General Meeting, by way of a bonus issue, the
Company's share capital was increased by issuing 78 873 421 new shares to the Company's
shareholders. As a result, the number of the Company's shares increased from 236 620 263 to 315 493
684. The Company's share capital has been increased from EUR 26 028 229 to EUR 34 704 306.
Details of the changes indicated above have been published by the Company in current reports no.
3/2022, 5/2022, 6/2022, 7/2022 and 8/2022.
Tallinn, September 15, 2022