Lehto Group Oyj: Lehto Group Plc: Resolutions of Lehto Group Plc's Annual General Meeting 2024 and the organizing meeting of the Board of Directors

The Annual General Meeting of Lehto Group Plc took place on 19 June 2024 in Vantaa, at meeting room Akropolis 1 of Technopolis Aviapolis in the address Teknobulevardi 3-5 F, 01530 Vantaa, Finland. The Annual General Meeting adopted the financial statements for 2023 and discharged the Members of the Board of Directors and the CEO from liability.

In addition, the Annual General Meeting reviewed the loss of share capital in accordance with the Chapter 20, Section 23 of the Finnish Limited Liability Companies Act. The main planned actions to be taken to restore equity, which are (i) the conversion of the majority of the company's EUR 15 million convertible bond into equity (ii) equity financing of EUR 2.5 million, and (iii) debt reductions according to the restructuring programme proposal, were reviewed in the Annual General Meeting. The company is not aware that any holder of convertible bond would object the conversion.

The use of profit shown on the balance sheet and payment of dividend

The Annual General Meeting resolved, in accordance with the proposal of the Board of Directors, that no dividend is distributed based on the adopted balance sheet for the financial year ended 31 December 2023.

Review of the Remuneration Report and Remuneration Policy

The Annual General Meeting resolved to approve the Remuneration Report 2023 and Remuneration Policy in accordance with the proposal of the Board of Directors. The resolutions were advisory.

Election and remuneration of the Members of the Board of Directors

It was resolved that the Board of Directors shall consist of four members.

The Annual General Meeting resolved, in accordance with the proposal of the Shareholders' Nomination Committee, that the following individuals be elected as Members of the Board of Directors: Hannu Lehto, Jani Nokkanen, Tarja Teppo and Timo Okkonen. The term of the Board members will expire at the end of the Annual General Meeting 2025.

The Annual General Meeting resolved that the Members of the Board of Directors shall be paid a yearly remuneration consisting of a cash remuneration and a share remuneration as follows:

-          Chair of the Board of Directors: A cash remuneration of EUR 18,000 and a remuneration of 80,000 shares, and

-          Deputy Chair and members of the Board of Directors: A cash remuneration of EUR 12,000 and a remuneration of 80,000 shares.

The remuneration in shares is paid in such a way that the Members of the Board of Directors are given either shares that are in the company's possession or new shares issued by the company without consideration or alternatively shares will be acquired from the regulated market (Nasdaq Helsinki Ltd) at a price determined by public trading in the name and on behalf of the Member of the Board of Directors. The Members of the Board of Directors shall not dispose such shares during their membership or before six months has passed from the expiry of the said membership.

The Annual General Meeting resolved not to pay a separate attendance fee to the members of the Board of Directors. However, the attendance fee for the members of the Committees of the Board of Directors is EUR 600 per meeting for the Chair of the Committee and EUR 400 per meeting for the members of the Committee.

Reasonable travel expenses caused by Board meetings or Committee meetings shall be paid in accordance with the instructions of the tax authority. The per diem allowances are included in the attendance fee.

Election and remuneration of the auditor

The audit firm KPMG Oy Ab was re-elected as the auditor. KPMG Oy Ab has informed the company that Authorised Public Accountant, Pekka Alatalo, acts as the responsible auditor. If the company shall also prepare its first statutory sustainability report for the financial period 2024, KPMG Oy Ab shall also provide the assurance for the statutory sustainability report for the financial period 2024 in accordance with the transitional provisions of the amended Finnish Limited Liability Companies Act (1252/2023).

It was resolved that the remuneration of the auditor will be paid according to invoice approved by the company. The same applies to the auditor's fees relating to the assurance of the company's statutory sustainability report for the financial period 2024.

Amendment of the Articles of Association

The company announced on 29 May 2024 that its Board of Directors has decided on a plan according to which the company will focus its business on real estate energy solutions and electricity storages (the "Energy Construction Business") and will seek to divest the prefabrication of building industry components of its subsidiary Lehto Components Oy.

For the transition to the Energy Construction Business, the Annual General Meeting resolved that the section of the Articles of Association concerning the sector be amended to read as follows:

"3 SECTOR

The company is involved in construction contracting, construction work, construction consulting, property development, property management, property investment, manufacturing of construction materials and prefabricated building elements and operations related to these as well as energy services, energy storage and distribution, energy saving services and ownership and sale of energy production equipment. The company may carry out its business through its operative Group companies. As the Group's parent company, Lehto Group Plc may be in charge of Group organisation, financing, purchases and other such administrative tasks."

Authorisation of the Board of Directors to decide on the purchase of the company's own shares

The Annual General Meeting authorised the Board of Directors to decide on the purchase of the company's own shares as one or several instalments using non-restricted shareholders' equity or without consideration, such that the maximum quantity repurchased be 19,556,568 shares. The quantity equals approximately 22 per cent of the total amount of company's shares. The shares shall be purchased through public trading organised by Nasdaq Helsinki Ltd in accordance with its rules or using another method. If shares are not repurchased without consideration, the consideration paid for the shares shall be based on the market price at the time of repurchase.

The authorisation also entitles the Board of Directors to decide on the repurchase of shares in different proportions than the proportion to the shares owned by the shareholders (directed repurchase) with weighty financial reasons. Shares may be repurchased to implement arrangements associated with the share-based incentive systems, remuneration of the Board of Directors or company's business operations, or to be otherwise transferred or to be cancelled. The repurchased shares can also be held by the company itself.

The Board of Directors is authorised to make decisions on all other conditions and circumstances pertaining to the repurchase of own shares. The repurchase of own shares against payment reduces the non-restricted shareholders' equity. The authorisation remains valid until the end of the following annual general meeting but in any case, not longer than 30 June 2025 and replaces the company's previous authorisation to repurchase own shares granted by the Annual General Meeting on 30 March 2023.

Authorising the Board of Directors to decide on the issuance of shares as well as issuance of options and other special rights entitling to shares as well as the transfer of own shares

The Annual General Meeting decided to authorise the Board of Directors to decide on the issue of a maximum of 39,271,653 shares through a share issue or by granting options or other special rights entitling to shares as one or several instalments. The quantity equals approximately 45 per cent of the total amount of company's shares. The authorisation includes the right to issue either new shares or own shares held by the company, either against payment or without consideration. New shares can be issued and own shares held by the company transferred in deviation from the shareholders' pre-emptive subscription right (directed issue) if there is a weighty financial reason for the company to do so and, in case of an issue without consideration, an especially weighty reason for both the company and in regard to the interests of all shareholders in the company. The Board of Directors is authorised to decide on all other conditions and circumstances pertaining to a share issue, to the granting of special rights entitling to shares, and to the transfer of shares.

The authorisation may be used, inter alia, to execute company's share-based incentive systems, to pay the remuneration of the Board of Directors, to strengthen the capital structure, to implement financing arrangements, to expand the ownership base, to use as consideration in transactions or other arrangements associated with the company's business operations, or when the company purchases assets associated with its operations.

The authorisation remains valid until the end of the following Annual General Meeting but in any case, no later than 30 June 2025 and it replaces previous share issue and option authorisations granted by the Annual General Meeting on 30 March 2023.

Authorizing the Board of Directors to decide on the issuance of shares as well as the issuance of options and other special rights entitling to shares for the conversion of the company's EUR 15 million convertible bond into shares with converted conversion ratio

The Annual General Meeting decided to authorise the Board of Directors to decide on the issuance of a maximum of 75,000,000 shares through a share issue or by granting options or other special rights entitling to shares in one or several instalments. The quantity equals approximately 86 per cent of the total amount of company's shares.

The authorisation entitles the Board of Directors to decide on the issuance of shares as well as special rights entitling to shares in different proportions than the proportion to the shares owned by the shareholders (directed issue). The authorisation includes the right to issue either new shares or own shares held by the company, either against payment or without consideration. The Board of Directors is authorised to decide on all other conditions and circumstances pertaining to the share issue and to the granting of special rights entitling to shares.

The authorisation may be used to amend the terms of the company's EUR 15 million convertible bond so that convertible bond may be converted into shares of the company with conversion ratio which deviates from the current terms of such convertible bond.

The authorisation is valid until the end of the following Annual General Meeting but in any case, no later than 30 June 2025.

Minutes of the meeting

The minutes of the meeting shall be made available on the Lehto Group Plc's internet site lehto.fi/en/agm as from 3 July 2024 at the latest.

The resolutions of the organizing meeting of the Board of Directors

In its organizing meeting held after the Annual General Meeting, the Board of Directors of Lehto Group Plc elected Timo Okkonen as its Chair.

As the operations of the company have significantly shrunken the Board of Directors resolved to discontinue the Audit Committee and transfer its duties to the full Board.

Based on the Board of Directors' independence evaluation, all members of the Board of Directors, apart from Hannu Lehto, are independent of the company as well as company's significant shareholders.
 

Vantaa, 19 June 2024
 

LEHTO GROUP PLC

BOARD OF DIRECTORS
Additional information
Hannu Lehto, CEO and Member of the Board
hannu.lehto@lehto.fi
+358 50 028 0448